Is Iran’s Renewable Energy Worth Investing?
Iran’s GDP grew 5.7% in 2006 and 9.1 in 2007 (more) when the country managed to attract billions of FDI over 2000-2007. World Bank foresee that Iran’s GDP could steadily grow to 5% and above from this point on. A fast pace of growth could create a challenge in Iran’s domestic market, and that’s where the opportunity is.
Upstream oil and gas projects are being negotiated and some are getting prepared for upcoming IPC bid rounds. Iran would take the advantage of additional volumes to improve the state of its current account. In their plan gas has a bigger role as additional gas supplies would be used to double petrochemical output, boost export to regional markets and injected in EOR fields.
Renewable energies are still in infancy stage in Iran, with only 70MW online. The major challenge of the sector is lack of financing. Given attractive feed-in-tariff’s set by SUNA (13- 32 cents per KW/h) and availability of human resources, infrastructure and EPC capacity, Iran’s renewable energy is at the verge of a massive growth.
Investments in this sector are estimated at $8 to $25 millions of dollars (US) with a payout of 2.5-4 years.
YellowDoor Energy a UAE based company with Canadian roots is already in talk for two 50MW solar plants in Iran. So is IPEK from Turkey.
Investment in Iran’s renewable energy market might be more attractive versus Iran’s oil and gas industry given smaller size of investment, shorter payout, and lower level of political risk.
Calgary: +1 (403) 400-4665
Tehran: +98 912 3234 051