Tehran Energy Exchange prepares to list first solar power plant project fund

Iran's Energy Exchange (IEE) (IRENEX) is preparing to list the country's first solar power plant project investment fund, with subscription expected to open within a month, the exchange's market development deputy said on May 21.

The fund marks the first time Iran's capital markets have been used to finance a solar power project directly, with the Energy Exchange positioning itself as a channel for infrastructure financing alongside its existing role in physical energy commodity trading.

Mahmoud Karimi, deputy for market development at the Iran Energy Exchange, said the registration process for the solar power plant project fund was underway by asset management firm Ararat Portfolio Management (Iran), in coordination with the Securities and Exchange Organisation (SEO).

"This fund, designed to create a transparent platform for investor participation in the construction of renewable power plants, has received the necessary licences for establishment and operation from the Securities and Exchange Organisation," Karimi said.

The fund is expected to complete all preparatory steps for its subscription offering within one month, after which investors will be able to purchase units through the Iran Energy Exchange and participate directly in the financing and construction of the power plant.

Karimi described the fund as a new model for channelling capital market resources to address Iran's energy imbalances and develop infrastructure, with the potential to attract both retail and institutional capital to the renewable energy sector.

Iran faces a structural electricity deficit, with peak summer demand regularly exceeding supply capacity.

The Pezeshkian government has sought to attract private investment into renewable generation to reduce dependence on ageing gas-fired plants and ease pressure on the national grid.

The fund is available to foreign investors through the SEO website, according to the press release by the organisation seen by IntelliNews.

Returns on investment would come through "non-traditional" channels, as investment in the country is currently prohibited due to US sanctions on international transfers from most countries, excluding Russia.