British renewable energy investor Quercus is to invest more than €500mn in a solar plant project in the first half of 2018, Iran Student News Agency reported on September 18, citing Reuters.

The deal for the installation, signed in London with Iran’s ambassador to the UK present, is expected to result in a 600-megawatt plant in central Iran that will generate energy to be distributed across central regions to begin with.

Diego Biasi, chief executive of Quercus, which has a track record of investing in renewable energy in Europe, reportedly said that the firm had decided to go for such a big project in order to obtain an endorsement from Iran’s ministry of energy.

“This is a project of national interest, so we got special support. We had enough investors interested so instead of splitting that across smaller projects which wouldn’t have given us the same relationship with the ministry, we decided to go for one,” he said in a phone interview with Reuters. The company's hope is that its approach will smoothly lead to more solar projects.

The project, signed for by Quercus and the energy ministry, will give the British firm full responsibility for construction, development and operation of the plant.

“The market is becoming more active on the permit side but on the construction side it hasn’t opened up yet. After this project we think there will be increasing interest from foreign investors,” Biasi said, adding interest was already quite strong.

Construction of the solar plant is expected to take three years, with each 100MW standalone unit becoming operational and connecting to the national grid according to six-month intervals.

Rather than investing via a fund structure, Quercus will set up a project company and investors will hold shares via a private placement. It has already attracted interest from private and institutional investors, including sovereign funds.

Iran’s current solar capacity stands at 53MW, according to latest energy ministry data.