Spain’s  Bester Generacion, a renewable energy specialist, has signed an 18-month contract to supply technical engineering services to the Iran Power & Water Equipment and Services Export Company (Sunir).

It is the second major contract signed with an EU company since the start of August as firms from countries applying international sanctions against Iran position themselves to return to the second largest economy in the Middle East. Italy’s Fata confirmed earlier this week it had been awarded a €500m ($548m) contract to build a major power station in Bandar Abbas.

The deal with Bester Generacion was signed on 9 August by Sunir’s managing director Bahman Salehi and Bester’s executive director Antonio Sanchez. It calls for Bester act as a strategic partner on the Iranian company’s renewables plan. This is expected to encompass both photovoltaic (PV) solar and wind turbine units.

A Bester spokesperson said she hoped that it could provide support for at least 1,000MW, though this will take time to deliver. Bester beat off competition from EU and other companies for the contract.

The deal is the first significant contract signed with a Spanish company since the Joint Comprehensive Plan of Action (JCPOA) was agreed in July. Bester won the deal in competition with other renewable power service providers.

Iran had 70,000MW of installed electricity generation capacity at the end of 2013, and demand was rising by about seven per cent a year. Its first large-scale commercial solar power plant was opened in Shiraq in 2008 with capacity of 250MW. The Yazd combined 467MW solar/thermal power at Yazd opened in 2009.

Iran’s Energy Minister Hamid Chitchian said in 2014 that Iran aimed to install 5,000MW of solar power units by the end of 2018. The demand for alternative energy sources has been intensified by the delays in the delivery of Iran’s civilian nuclear energy programme. Its single nuclear power plant in Bushehr has capacity to produce 915MW.

Iran announced in early 2014 a renewable energy five-year feed-in tariff of IR 4,442 ($0.15) a kWh It also provides grants of up to 50 per cent of the installation costs for residential PV arrays, revealed Chitchian.

Bester is one of the EU’s leading renewable energy service providers.