UK’s Quercus pulls plug on $570million Iran solar plant

OSLO: British renewable energy investor Quercus said it will halt the construction of a 500 million euro ($570 million) solar power plant in Iran due to recently imposed U.S. sanctions on Tehran.

According to Iranian energy ministry data, In June, before the U.S.-imposed sanctions, more than 250 companies had signed agreements to add and sell power from about 4 gigawatt of new renewable in the country, which has only 602 MW installed.

Washington reimposed sanctions last week after pulling out of a 2015 international deal aimed at curbing Iran’s nuclear program in return for an easing of economic sanctions.

U.S. president Donald Trump has also threatened to penalize companies that continue to operate in Iran, which led banks and many companies around the world to scale back their dealings with Tehran.

Quercus chief executive Diego Biasi said in an email on Tuesday, “Following the U.S. sanctions on Iran, we have decided to cease all activities in the country, including our 600 MW project. We will continue to monitor the situation closely.”

The firm will continue to monitor the situation closely, said Biasi, who declined to comment further.

Last year Quercus said it would set up a project company and sell shares via a private placement after attracting interest from private and institutional investors, including sovereign wealth funds.

Construction was expected to take three years, with each 100 MW standalone lot becoming operational and connecting to the grid every six months.

Independently-owned Quercus has a portfolio of around 28 renewable energy plants and 235 MW of installed capacity.

According to its website, “The firm, founded by Biasi and Simone Borla in 2010, controls five investment funds and has a network of highly regarded external partners.”

The 600 MW plant it aimed to construct in Iran would be the firm’s largest investment. Quercus declined to comment on the details of its decision to cease the plan and on any financial losses that could result from it.

Fearing the consequences of the U.S. embargo, a string of European companies have recently announced they would scale back their business in Iran.

Another project, planned by Norway’s Saga Energy, which said last October it aimed to build 2 GW of new solar energy capacity in Iran and to start construction by the end of 2018, has also stalled.

The solar plant in Iran would have been the first renewable energy investment outside Europe by Quercus and the world’s sixth largest, with a 600 megawatt (MW) capacity.

Iran has been trying to increase the share of renewable-produced electricity in its energy mix, partly due to air pollution and to meet international commitments, hoping to have about 5 gigawatt in renewable installed by 2022.