Donald Trump. Picture: REUTERS
Donald Trump. Picture: REUTERS

Oslo — British renewable energy investor Quercus said it will halt the construction of a €500m solar power plant in Iran due to recently imposed US sanctions on Tehran.

The solar plant in Iran would have been the first renewable energy investment outside Europe by Quercus and the world’s sixth largest, with a 600MW capacity.

Iran has been trying to increase the share of renewable-produced electricity in its energy mix, partly due to air pollution and to meet international commitments, hoping to have about 5GW in renewables installed by 2022.

In June, before the US-imposed sanctions, more than 250 firms had signed agreements to add and sell power from about 4GW of new renewables in the country, which has only 602MW installed, Iranian energy ministry data showed.

Washington reimposed sanctions last week after pulling out of a 2015 international deal aimed at curbing Iran’s nuclear programme in return for an easing of economic sanctions.

US President Donald Trump has also threatened to penalise companies that continue to operate in Iran, which led banks and many global firms to scale back their dealings with Tehran.

"Following the US sanctions on Iran, we have decided to cease all activities in the country, including our 600MW project. We will continue to monitor the situation closely," Quercus CEO Diego Biasi said on Tuesday.

In 2017, Quercus said it would set up a project company and sell shares via a private placement after attracting interest from private and institutional investors, including sovereign wealth funds.

Construction was expected to take three years, with each 100MW lot connecting to the grid every six months.