VATIS UPDATE Article

The Islamic Republic of Iran plans to produce 5GW of renewable energy by 2020, as the country welcomes international investment for the first time in a decade. Following the removal of sanctions on Iran, energy demands are starting to increase, particularly from heavy industry, and this means output from renewables is expected to grow. The country’s renewables body is looking to attract $10bn of direct private investment by 2018 and $60bn by 2025.

It has attractive subsidy rates that it hopes will be a factor in bringing in investors from Europe. The country has a GDP of $406.3bn, making it the second largest in the MENA region. International trade with the region is now a possibility after the recent lifting of the nuclear sanctions that were placed on Iran by the UN, EU and USA in 2006. The country has since then changed administration. Iran now has access to billions of dollars of frozen assets in foreign banks.

They will also be delisted from the blacklists of banks and financial institutions, which will allow more freedom for Iranian and some international banks to do business. As a result, Iran is now able to benefit from the renewable energy sector that could grow rapidly in coming years. Output from renewables currently stands at less than 0.2% of total power generated in Iran. However the country plans to dramatically improve that amount as the government has reduced subsidies for fossil fuels in recent years.