Iran Energy Ministry has signed a deal with an undisclosed German energy major for developing solar power plants, totalling 1,250MW in the Tehran province.
Great Tehran Electrical Distribution managing director Ali Barband said that the firm will set up multiple solar energy facilities in Tehran, Tabriz and Isfahan.
Financial details about the transactions have not been disclosed.
The deal includes construction of a 150MW facility in Kahrizak, 200MW in Varamin and 150MW in Malard, reports Press TV.
750MW of solar projects will also be developed in central Isfahan and northwestern Tabriz as a part of the project.
Barband was cited by Mehr news agency as saying that the firm will be fully financing the projects in return for a guarantee on electricity purchase. The company will also hold a 20-year lease for land at a reduced price for the developments.
The German giant is expected to start construction for the first solar project under the deal in early 2016, and complete it by May 2016.
Barband added: "The envisaged plan is to increase power generation capacity during the post-sanction era by various means, including foreign direct investment, construction of new solar, wind and incinerator plants as well as building small-scale plants with distributed generation."
Around 94% of Iran’s power mix is derived from fossil fuels, which the country seeks to replace with renewable sources.
Iran intends to install 5GW of renewable energy capacity by 2020, for which the Energy Ministry has already initiated development works for 500MW of wind converter and 100MW biomass projects.
Potential renewable energy capacity in Iran is huge, with only wind capacity expected to be 30GW.
German firms are reportedly planning to spend $331m in 2016 for wind power projects in Iran.
Image: The German giant is expected to start construction for the first solar project under the deal in early 2016. Photo: courtesy of Naypong/ FreeDigitalPhotos.net.