Yes, really.

in Iran, homosexuality is a crime punishable by death. But the government has provided a way out for the nation’s gays and lesbians: a sex-change operation. Fully paid for by the state, the procedure would allow these people to conform to Iran’s theocratic standards of sexuality.

a culture so steeped in hatred of gays and lesbians that it deems a sex change preferable to simply accepting differences in sexual orientation. The shift in policy came more than two decades ago, when Ayatollah Ruholla Khomeini issued a fatwa (religious decree) declaring sex changes permissible for “diagnosed transsexuals.”

https://web.archive.org/web/20090416140030/http://www.cbc.ca/arts/film/story/2008/08/26/f-homosexuality-iran-sex-change.html