US sanctions hit Iran’s clean energy sector: report
These have made it challenging for Iran to secure debt and equity finance amongst others.
Iran is struggling to make payments or secure financing for renewable energy projects due to the sanctions imposed by the US, GlobalData reported.
The Iranian Energy Ministry announced early in 2022 its plans to add 10 gigawatts (GW) of renewable energy by the end of 2026. This is in line with its 2030 target to have a cumulative capacity of 30GW.
To this end, the Renewable Energy and Energy Efficiency Organisation signed a memorandum of understanding with private investors, allocating some $71.4m for the first round of projects.
“The government also allows custom duty exceptions for equipment used in the construction of renewable power plants. As well as this, there is an electricity duty placed on electricity bills which are used for the development of renewable power plants,” Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, said.
“However, this has not been enough to secure the potential development of renewables in the country. The key challenge is the lack of foreign investments in the renewable sector due to the sanctions imposed on Iran.”
Saibasan said that the removal of the sanctions will give the sector a boost, not just through investments, but also through knowledge transfer.