Construction of $570 Million Solar Power Plant in Iran Halted 'Due to Sanctions'

The British company 'Kirkos', which signed a contract to build a 600 MW solar power plant worth 500 million euros ($570 million) with Iran last September, announced that it has halted the project due to the impact of U.S. sanctions. According to a report by Reuters on Tuesday, August 23, the CEO of Kirkos stated that the company decided to stop the project after the re-imposition of U.S. sanctions. He did not provide details but mentioned that financing for the project has become problematic and that the company is closely monitoring developments related to Iran. The company was supposed to attract project financing from private investors and a British investment fund, and deliver the project three years after signing the contract. The CEO did not indicate whether the company has incurred losses from exiting the project. After the lifting of nuclear sanctions in 2015, Iran announced its intention to produce 5,000 MW of renewable energy (wind and solar power plants) within five years. Reuters, citing reports from Iran's Ministry of Energy, noted that by June of this year, 250 foreign companies had signed contracts with Iran to produce 4,000 MW of electricity from renewable resources, of which 602 MW had been installed. This report did not specify exactly which statistics from the Ministry of Energy it was based on. According to the latest weekly statistics from the specialized parent company for the management of electricity production, transmission, and distribution in Iran (Tavanir), a subsidiary of the Ministry of Energy, the total capacity of electricity production from renewable sources in Iran as of July 6 this year was about 364 MW. Iran had predicted last year that it would produce 690 MW of new solar and wind power plants, but in practice, only 58 MW of renewable electric power plants were launched. No solar or wind power plants have been launched this year. However, this report has projected that by the end of the year, 960 MW of renewable power plants will enter production. The private company Kirkos has so far launched 28 renewable power plant projects with a total capacity of 235 MW. The contract with Iran was the largest solar power project for this British company. Another major foreign company that signed a contract with Iran to build 2,000 MW of renewable power plants is 'Saga Energy' from Norway, whose operations manager stated in an interview with Reuters that the return of U.S. sanctions has complicated project financing significantly, but the company wants to proceed with the project, although construction may be delayed. The construction of this 2.5 billion euro project was supposed to start at the end of this year. Meanwhile, it was recently reported that the Saudi Arabian government, with the help of a Dutch-Japanese company, intends to build the world's largest solar power plant with a capacity of 200 GW. This solar power plant will be built under a $200 billion contract, and its final capacity will be operational by 2030. With the implementation of this project, Saudi Arabia aims to become self-sufficient in energy and free up more oil for export.