Iran’s Economic Council has approved a plan for the country’s sovereign wealth fund to invest $2.3bn in solar energy, as the government seeks to diversify its power mix and ease growing strain on the electricity grid, IRNA reported on July 28.

Chinese partners will play a large part in the mass adoption of solar in the country, with contracts to supply parts for the solar arrays delivered by ship to southern ports, according to reports on the ground. 

The funding – greenlit following approval from Supreme Leader Ali Khamenei – will be channelled through the National Development Fund (NDF) and focused largely on the construction of rooftop solar farms, with a combined capacity target of 7,000 MW.

Hamid Pourmohammadi, the head of Iran’s Plan and Budget Organisation, signed off on the measure and forwarded it to the Ministry of Energy and the NDF for implementation.

Under the plan, the NDF will cover 80% of the financing for approved projects, with private partners required to shoulder the remaining 20%.

Applicants may seek funding for projects of up to 1,000 MW each, with intermediaries managing the financial and technical aspects on behalf of the fund.

Iran, which receives over 300 sunny days a year, has launched a nationwide drive to ratchet up its use of renewables, especially solar power, amid soaring demand and ageing thermal infrastructure.

The country aims to add 30,000 MW of renewable capacity – mainly solar – in the next three years.

Iran’s total electricity generation capacity hovers around 95,000 MW, over 90% of which comes from thermal and gas-fired power stations, government figures show. Renewables account for a mere 2.1%, or around 2,000 MW, of the national energy mix.

Officials had warned earlier this year that power shortages during the peak summer months could reach 25,000 MW, but recent estimates suggest that energy-saving measures have helped trim the shortfall to 14,000 MW, according to state electric utility Tavanir.

The government hopes the new solar initiative will help plug that gap while reducing reliance on fossil fuels and cutting emissions.