Switzerland’s MECI Group International signed an agreement with Iran’s government to build a 750 million-euro ($839 million) wind farm, Bloomberg reported.
The project, located in the mountainous region in northern Iran, will have 270 megawatts installed capacity, according to a statement from the Swiss holding company. Turbine testing is already happening onsite, according to MECI Chairman Jeremiah Josey.
“Iran is at a very interesting point in history,” Josey said in a phone interview. “There is so much growth to be had. They can get through at least 20 years of technological catch-up in five years.”
Tehran has been flooded with at least 150 trade delegations after most economic sanctions were lifted in January. Officials have been courting international renewable-energy investments in the market of 78 million people. Generating more green power at home would allow the country to export more of its fossil fuels abroad, Energy Minister Hamid Chitchian said in a July interview.
MECI signed a 5-year power purchase agreement with the Iran’s energy ministry with a fixed feed-in tariff. Josey said he expects the contract will be extended “once we prove ourselves.”
MECI, which also agreed to build a 100-megawatt combined heat and power plant that will burn natural gas, will finance the project with a bond issue and equity partners, according to Josey. The expected debt-to-equity split is 80/20, he said.
Josey anticipates signing agreements for another 500 megawatts of renewable-energy plants once the wind farm progresses. MECI has a target to install 1 gigawatt of clean power in Iran, which will be a mix of solar and wind.
“By the middle of next year, if we don’t have it up and running, we should at least have signed 1 gigawatt,” he said.