A consortium of Chinese and Hong Kong companies has signed an agreement with Iran's Industrial Development and Renovation Organization for a joint venture to produce solar photovoltaic panels in Iran.
The preliminary deal with China's Sunshine Solar Technology and Konda Energy of Hong Kong calls for establishing an automated production line for solar panels, a statement on IDRO's website announced.
The agreement is expected to be finalized in a month, with IDRO having a 30% stake in the project.
Fardad Daliri, deputy for Advanced Industries Development at IDRO, said the joint venture will also serve as a platform "to expand research and development in solar power".
The project is expected to cost around $215 million, IRNA reported.
The East Asian firms join the ranks of European companies in a race to tap into Iran's underdeveloped renewable energy market, which is attracting billions of dollars in finance for new solar and wind projects.
According to government reports in October, foreign investors have proposed over $4 billion worth of renewable power projects since last year's lifting of sanctions.
It was followed by a statement from the government's spokesperson last month that President Hassan Rouhani's administration has ratified the construction of €6.3 billion ($7.3 billion) worth of renewable power projects through foreign investment.
Central to new investments are a $2.9-billion preliminary agreement with Norway's Saga Energy and a $600-million contract with London-based Quercus, with the latter committed to building one of the world's largest solar farms with a 600-MW capacity.
IDRO Activities
IDRO, which operates in commercial, mining, agriculture, railroad and aviation sectors, has been expanding its foray in energy sector.
Germany's SCHMID Group signed a deal with IDRO last year to "establish a fully integrated photovoltaic manufacturing plant" in Iran that would incorporate the "entire photovoltaic value chain", reads a statement on SCHMID's website.
Russian gas giant Gazprom also signed an initial agreement with IDRO last month to cooperate in unspecified oil, gas and energy projects.
Iran holds some of the world's largest oil and gas riches and renewable energy sources have long lived under the shadow of fossil fuels that meet most of the country's energy needs.
But better investment outlooks after last year's lifting of sanctions, alongside national plans to raise the trifling share of renewable, have heated up competition in Iran's solar and wind energy markets.
Renewables account for less than 500 megawatts in Iran's installed power generating capacity of 77,000 MW.
Some experts say a lack of competition in an energy market largely dominated by the public sector is holding back the renewable industry. The Energy Ministry says it hopes to launch 1,000 MW of renewable capacity a year through 2022 with the help of the private sector.
Add new comment
Read our comment policy before posting your viewpoints