The deal was signed between Norway’s Saga Energy and Iran’s state-owned Amin Energy Developers at the Norwegian embassy in Tehran on Tuesday to install solar panels in multiple sites around the Central desert region of the country to produce two gigawatts of power.
The new solar project is being financed by a consortium of European private and state investors, and backed by a sovereign guarantee from the government of Iran.
"We hope to build a factory in Iran to build the panels so that we also generate jobs," said Saga's development manager Gaute Steinkopf at signing the deal.
The deal was signed just days after US President Donald Trump gave a bellicose speech, imposing further sanctions on Iran and calling for European allies to curb their financial dealings with the country.
But Norwegian Ambassador to Tehran Lars Nordrum underlined that his country "is fully committed to the JCPOA (nuclear deal) and this is proof that we have taken the opening very seriously, and we will see more investment very soon".