Specialist renewable energy investor Quercus will invest nearly $600 million in a solar power project in Iran, with construction slated to start in the first half of 2018, according to the company’s chief executive.
The planned 600-megawatt (MW) plant, located in central Iran, will be the sixth largest globally, behind projects of up to 1.5 gigawatts (GW) in China and India.
Diego Biasi, chief executive of Quercus, which has a track record of investing in renewable energy in Europe, said the firm had decided to go for such a big project to get an endorsement from Iran’s Energy Ministry.
“This is a project of national interest, so we got special support. We had enough investors interested, so instead of splitting that across smaller projects -- which wouldn’t have given us the same relationship with the ministry -- we decided to go for one,” he said. The hope was this would lead to more solar projects.
Established in 2010, independently owned Quercus has a portfolio of around 40 renewable energy plants across Europe. The Iran project is its first investment outside Europe and came in response to client demand, Biasi said.
Under the terms of the agreement signed by Quercus and Iran’s Energy Ministry, the firm will be responsible for the construction, development, and operation of the plant.
Construction is expected to take three years, with each 100 MW standalone lot becoming operational and connecting to the grid every six months, to mitigate the risk for investors.
Rather than investing via a fund structure, Quercus will set up a project company and investors will hold shares via a private placement. It has already attracted interest from private and institutional investors, including sovereign funds.
Iran is heavily reliant on natural gas and oil to generate power, but air pollution is driving interest in renewables, and Iran has made a commitment to develop 5 GW of new renewable energy capacity by 2020.
Current and former Iranian and UK officials gathered in London to announce a 600-million euro plan to develop a giant solar park with cash from investors in Asia, Europe, and the Middle East. The agreement underscores how difficult it will be for Trump to dismantle the 2015 nuclear accord, or JCPOA, between six world powers and Iran.
Iran’s installed solar energy capacity is currently 53 MW, according to Iranian Energy Ministry data, but 76 firms have signed deals to study building an extra 932 MW of capacity. Interest has grown since the lifting of international sanctions on Iran in 2016.
Meanwhile, according to Bloomberg, “The UK deepened its economic relationship with Iran in a solar deal worth $720 million less than a day after the U.S. president called the Persian Gulf nation a ‘rogue state’ and threat to global security.”
Current and former Iranian and UK officials gathered in London to announce a 600-million euro plan to develop a giant solar park with cash from investors in Asia, Europe, and the Middle East. The agreement underscores how difficult it will be for Trump to dismantle the 2015 nuclear accord, or JCPOA, between six world powers and Iran.
“The British government has made it absolutely clear that it sees JCPOA as important, it thinks the JCPOA should continue,” said Norman Lamont, a former chancellor of the exchequer who is also chairman of the British Iranian Chamber of Commerce. “The British government is also backed by other governments in the UK and in Europe.’’
The future of JCPOA, which halts suspicious Iranian nuclear activities in exchange for sanctions relief, has been at risk since President Donald Trump took office in January.
Trump told world leaders at the UN annual General Assembly on September 18 in New York City that it was “one of the worst” deals the United States has ever entered.
However, the U.S. permanent representative to UN, Nikki Haley, has pointed out that Trump’s latest comments on JCPOA do not necessarily mean Washington has decided to drop out of the deal.
The United Kingdom’s trade with Iran rose 42 percent from January to October in 2016 and 57 percent in the same period in 2017, according to Lamont. Global trade with Iran rose 13 percent last year to $113 billion, according to data compiled by Bloomberg.
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