Oil Price - Foreign investors have filed proposals for a combined US$3.6 billion to develop renewable energy projects in oil and gas rich Iran, which has set an ambitious target to add 5 GW of renewable power generation capacity by 2022, Iran’s Financial Tribune reports, quoting a senior energy official.

According to Mohammad Sadeqzadeh, the head of state-held Renewable Energy and Energy Efficiency Organization (Satba), the target to add at least 1 GW of renewable capacity a year is feasible.

Currently, Iran--which holds the world’s fourth-largest proved crude oil reserves and the second-largest natural gas reserves—is overly reliant on fossil fuels to meets its energy demand, and its renewable capacity is just 360 MW. Plans are that by March 2018, Iran will have renewable capacity of 600 MW, Satba said last month, quoting the energy minister.

According to a Middle East Institute analysis, Iran’s energy mix is almost exclusively dominated by natural gas and petroleum derivatives such as fuel oil and gasoline to power thermal power plants, which meet some 98 percent of the total energy demand. The other 2 percent comes from hydropower, nuclear, biofuels, and other renewable sources.

Iran’s government is targeting the installation of more than 5,000 MW renewable capacity by 2022, which would include 4,500 MW of wind power and 500 MW of solar power.

In December 2015, just a month before most Western sanctions on Iran’s oil were lifted, Mostafa Rabeie, Head of International Affairs at the Renewable Energy Organisation of Iran, told Frost & Sullivan that in order to reach the 5 GW of renewable energy, Iran needed investments of more than US$10 billion.

After major restrictions on domestic and foreign financing in Iran were removed, the investment goals of US$10 billion by 2018 and US$60 billion by 2025 “now appear feasible”, the Middle East Institute said in early 2016.