TEHRAN – Iran’s Supreme Economic Council has approved a $3.2 billion investment from the National Development Fund (NDF) to support the construction of 7,000 megawatts of solar power capacity, with a focus on rooftop units, officials said on Monday.

The decision, based on a directive issued by the Leader of the Islamic Revolution allowing the NDF to invest in the energy sector, was announced by Vice President Seyed Hamid Pourmohammadi, who also heads the Planning and Budget Organization. The authorization has been formally communicated to the Energy Ministry and the NDF.

The investment will prioritize solar systems that feed electricity directly into local distribution networks, particularly small-scale rooftop units installed by households or private entities. These decentralized systems are expected to enhance grid stability and reduce pressure on traditional power plants.

The financing structure allocates 80 percent of the required capital to the NDF and 20 percent to private-sector participants. Each investor can apply for up to 1,000 megawatts of capacity, with returns for the sovereign wealth fund set at an annual rate of eight percent in hard currency.

The NDF will disburse the funds through an intermediary financial institution tasked with managing cash flow, credit oversight, and market operations.

To encourage private participation, the Energy Ministry—through its Renewable Energy and Energy Efficiency Organization (SATBA)—will guarantee the purchase of unsold surplus electricity at up to 70 percent of the average green energy price on the Iran Energy Exchange. This guarantee will be facilitated through “future electricity bonds,” a new financial tool introduced to boost renewable project bankability.

The announcement comes as Iran accelerates efforts to expand renewable energy production amid rising domestic demand and the long-term need to diversify away from fossil fuels. Officials say the country aims to install 10,000 megawatts of renewable capacity in the near future, with rooftop solar playing a key role in meeting both environmental and grid resilience goals.

EF/MA