Iran seeks to fund and coordinate energy projects within the SCO framework
Iranian Vice President and chief economic official Mohammad Mokhber unveiled a plan to create a dedicated fund that would co-finance oil and gas ventures within the Shanghai Cooperation Organization (SCO). The announcement came at a SCO heads of government meeting in Kyrgyzstan and signals a strategic push for regional cooperation on energy infrastructure, trade flows, and Eurasian economic integration. The move highlights Iran’s intent to deepen involvement in a collaborative framework focused on secure energy supply chains and cross-border collaboration among SCO member states.
In outlining the plan, Mokhber explained that the initial phase would prioritize exporting technical and engineering equipment rather than immediate large-scale construction. This equipment-led approach aims to strengthen supply chains that support energy production and project execution. By concentrating early action on gear, tools, and know-how, the initiative seeks to accelerate regional participation in energy ventures while reducing execution risk and helping partner countries build local capacities that sustain progress over time.
Beyond financing, the plan envisions a regional energy-trade hub that connects oil and gas activities with renewable energy sources. The hub would serve as a platform for diversified energy portfolios, greater regional energy security, and a steady flow of investment across traditional hydrocarbon projects and cleaner energy initiatives. The concept aims to create a dynamic node that aligns energy extraction, processing, and distribution with advances in renewables, storage, and grid modernization to support long-term regional resilience.
At the regional level, SCO leaders described the organization as continually evolving as new members join and the bloc broadens its scope. Russian Prime Minister Mikhail Mishustin was en route to Kyrgyzstan for the summit, underscoring ongoing participation by major regional powers in shaping the agenda and outcomes. The SCO’s mission remains to foster cooperation on trade, energy, security, and development, with a clear emphasis on building integrated regional systems that support sustainable growth and shared prosperity across member economies.
The SCO originated in Shanghai on June 15, 2001, as a platform for collaboration among a core group of Eurasian states. Over time, the organization expanded to include additional members such as Pakistan and India, while founding participants like Russia, Kazakhstan, China, Kyrgyzstan, Tajikistan, and Uzbekistan remained central. Iran has held observer status since 2005 and joined as a full member on July 4, 2023, marking a strategic shift driven by evolving regional dynamics and Iran’s interest in broader economic and security cooperation. Iran’s accession is often discussed in the context of geopolitical constraints and the desire to participate more actively in regional development efforts that cross traditional energy and trade channels, creating new avenues for collaboration and investment within the SCO framework.
Analysts watching regional politics note that Iran’s SCO membership could influence energy markets, investment flows, and the governance of cross-border infrastructure projects. Observers emphasize that the expansion of the SCO into a more comprehensive energy and trade network could affect pricing mechanisms, financing models, and the speed at which large-scale projects move from planning to implementation. Integrating renewables alongside oil and gas presents a path toward diversified energy portfolios and greater resilience for member economies, a trend that could reshape regional competitiveness as markets adapt to evolving energy demand and policy priorities.
Industry experts also point out that successful participation in SCO activities requires synchronized regulatory standards, transparent procurement processes, and robust international cooperation mechanisms. These elements help reduce risk for investors, ensure that co-financed projects meet environmental and safety standards, and align with broader regional development goals. Iran’s active role in proposing a dedicated energy-finance instrument aligns with efforts to streamline access to capital, technical knowledge, and project governance for capital-intensive energy ventures across the SCO area.
In assessing potential outcomes, observers highlight that the SCO’s trajectory toward greater integration in energy and trade could spur technology transfer, boost regional connectivity, and diversify export routes. For Iran, the strategy signals a commitment to strengthening ties with neighboring economies while balancing traditional hydrocarbon activities with a growing emphasis on renewable resources. The resulting mix is expected to contribute to more stable energy supplies and broader economic opportunities across the SCO region, reinforcing a pragmatic approach to development that leverages both conventional resources and clean-energy potential for long-term value creation.
[Citation: SCO press statements and regional analyses]