PV megaproject for Iran

2 November 2017



Quercus – an investor specialising in utility-scale renewable energy projects – has announced the launch of a 600 MW photovoltaic plant project in Iran, one of the world’s largest PV projects to date.


Quercus – an investor specialising in utility-scale renewable energy projects – has announced the launch of a 600 MW photovoltaic plant project in Iran, one of the world’s largest PV projects to date.

As part of the agreement signed by Quercus and Iran’s Ministry of Energy, the firm will be responsible for the construction, development and operation of the plant. The total construction period is expected to be around three years, with the development of one fully operational 100 MW standalone tranche every six months.

Following significant interest from investors and building on Quercus’ existing experience – which has seen it assemble a 40-plant portfolio since being founded in 2010 – the Iran project represents the firm’s first investment outside Europe.

Up to now Quercus has tended to concentrate on UK and Italy – and says it has delivered a minimum 6% dividend distribution and 9-11% gross internal rate of return (IRR) on its investments. The firm has launched a number of funds that focus on investing in and managing renewable assets.

For Iran, Quercus is advising on new funding structures and is launching a specialist team to help deliver the project on the ground, including a head of engineering, a financial controller, project co-ordinator, planning manager and procurement staff, based in Dubai and Tehran.

Quercus regards Iran as providing attractive investment opportunities, noting that it is the Middle East’s second largest economy and the region’s biggest renewable energy market. “This has been helped by the Iranian government’s moves to bolster the market”, says Quercus, including:

  • A clear commitment by Iran to invest in and develop its renewable energy capacity over the coming years. Iran’s Sixth Development Plan aims to see 5 GW of new renewable energy capacity installed by 2020 (5% of total generation).
  • Plans to reduce CO2 emissions by at least 260 000 tons/y.
  • Offering a positive regulatory and legislative environment that supports renewables. The Ministry of Energy created SATBA to oversee and manage the renewables market, including a feed-in tariff that is increased by up to 30% if local equipment and components are used and tax holidays if the plant is located in underdeveloped areas.
  • Creating an attractive market for investment compared to prospects in mature markets. For example, in co-operation with the Renewable Energy Organization of Iran (SUNA), the government introduced guaranteed twenty-year power purchase contracts that offer developers an attractive fixed price for electricity produced from renewables.

On a practical level, Quercus points out that Iran enjoys around 300 sunny days per year. 



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