Page 29 - bne IntelliNews Georgia country report November 2017

Opinion
November 11, 2017 www.intellinews.com I Page 29
In April Greek engineering firm Metka and Iran’s Ghadir Electricity and Energy Company announced that they had completed a $15mn 10 MW plant near the city of Isfahan. In July a delegation of seven German companies operating in the renewa- bles sector signed a memorandum of understand- ing to develop projects in North Khorasan province. The same month saw the launch of the $27mn
20 MW plant in Kerman province — a collabora- tion between local operator Mokran Solar Energy Company and the German firm Adore, with Swit- zerland’s Durion the main investor.
In September British green energy investor Quercus, in its first investment outside Europe, announced plans for a $580mn 600 MW plant in central Iran, which when completed will be one of the largest solar projects in the world. Iran’s am- bassador to the UK Hamid Baeidinejad said the deal would help support Iran’s goal of becoming
a “major hub of solar energy serving the region and beyond”. This investment was eclipsed last month by the Saga Energy deal with state-owned Amin Energy Developers. They aim to build plants around the country, with a combined 2GW capacity.
According to Iran's Renewable Energy and En- ergy Efficiency Organisation, foreign investors have proposed $4.1bn worth of renewables pro- jects since international sanctions were removed in January 2016. The government has set itself ambitious renewables targets, with plans to add 1,000 MW of green energy capacity annually over the next five years.
While progress is being made, there are significant challenges facing the sector. Some commentators point to an ageing power grid and a lack of sufficiently experienced domestic green energy operators. They also suggest that the debt-burdened energy ministry’s inability
to pay the billions of dollars it owes conventional electricity-generating companies does not bode well for investors in non-fossil fuel
power projects.
Moreover, it is unclear whether European investment in green energy and other sectors — including manufacturing and oil and gas — will
be affected by US President Donald Trump’s increasing opposition to the nuclear deal, despite Iran’s compliance. In October he refused to certify it, believing it does little to curb what is seen as Tehran’s destabilising influence in the region. Trump tasked Congress to draw up legislative amendments, establishing “trigger points” that would prompt the US to withdraw from the agreement. The move has alarmed the EU which remains committed to economic engagement with Iran. Its immediate concern is that Washington’s hardening position may prompt some European companies to review their investment plans.
Yigal Chazan is an associate at Alaco. Alaco Dis- patches is the business intelligence consultancy’s take on events and developments shaping the CEE/ CIS region.