Norwegian firm signs 2 GW, $2.9bn solar project deal in Iran

Saga Energy, a Norway-based developer of solar panels and solar plants, has signed a €2.5 billion ($2.94 billion) deal with Iran’s Amin Energy to build as much as 2 GW of PV projects in the country, pv magazine understands.

Saga Energy is a partner of Delta, which is a Taiwan-headquartered power electronics firm that specializes in solar inverters. Reports suggest that the deal is awaiting the finalization of economic guarantees from the Iranian government, most likely SATBA, the ministry for renewable energy.

Iran has set an ambitious goal of installing 5 GW of renewable energy capacity by 2022, and has set generous FIT rates for large scale solar plants that have already attracted a trickle of European investors, including KPV Solar from Austria, and Quercus from the U.K., who are embarking on the development of a 600 MW solar farm in central Iran.

SATBA’s stated aim is for the 5 GW total to be reached exclusively with foreign private investment, and Saga Energy is reported to be relying on banks, pension funds and Norwegian state export guarantees to fund the 2 GW plan. SATBA will underwrite a 25-year PPA for the solar energy, and will likely open a revolving Letter of Credit, making payments to Saga Energy every six months.

Reuters also adds that the ultimate aim of Saga Energy is to develop solar panel production facilities in Iran. Under the current terms of the Iranian FIT, solar installations built using locally produced components can receive a 30% higher tariff.

Rune Haaland, Saga Energy spokesperson, told Reuters that the firm hopes to construct the 2 GW of solar capacity in Iran over the next four to five years. “Saga and Lithuania’s SoliTek will produce the solar panels, with Delta Electronics providing the installation of electronics such as inverters,” Haaland said.

Of course, no mention of Iran can pass without reference to the nuclear deal – the JCPOA – currently in jeopardy following the belligerent words of U.S. President Donald Trump, who has threatened to walk away from the deal that saw international sanctions on Iran lifted in 2015.

“We are a little but worried about what Trump is doing, we are very much in favour of the atomic deal, but we will of course continue with our plans whatever Trump does, no doubt about that,” Haaland told Reuters.

* This article was amended on January 31, 2018 to correct a previous error that stated Saga Energy was a subsidiary of Delta. In actual fact Saga Energy is a partner of Delta Energy Group.