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Iran's President Mahmud Ahmadinejad has launched the first phase of a project aimed at pumping water from the Caspian Sea to a desert city in Iran's central region.

According to Iranian state media, the initial phase of the project will cost about $1 billion and will include building a desalination plant and pipes during the next two years to supply water to the city of Semnan.

The first desalination plant to be built would reportedly have a capacity of 200 million cubic meters per year.

The ambitious project is being handled by the Khatam al-Anbiya group, the industrial arm of Iran's powerful Revolutionary Guards, which have interests in the country's key economic sectors.

Based on reporting by AFP, IRNA, and RFE/RL's Radio Farda

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