EghtesadOnline: Since Iran’s nuclear accord with world powers–officially known as the Joint Comprehensive Plan of Action–was implemented on January 16, 2016, the country has engaged in negotiations to attract foreign direct investments worth $80 billion, announced the director of the Organization for Investment, Economic and Technical Assistance of Iran.
“Iran has held negotiations with Italy’s Medibank and SACE export guarantee for €2 billion ($2.24 billion), Exim Bank of China for $30 billion, China Development Bank for $15 billion, Korea Export–Import Bank for $8 billion and Korea Trade Insurance Corporation for $5 billion to receive foreign finance,” Mohammad Khazaei was also quoted as saying by Shada, the official news outlet of the Economy Ministry.
According to the official, other parties involved in finance negotiations with Iran include Japanese Nippon Export and Investment Insurance and the Japanese Ministry of Finance for $10 billion, the Japan International Cooperation Agency for €1.2 billion ($1.34 billion), Russian Ministry of Economic Development for €5 billion ($5.6 billion) and the Norwegian Guarantee Institute for Export Credits for €1 billion ($1.1 billion).
Khazaei, whose organization helps facilitate the flow of foreign finance and is affiliated with the Economy Ministry, noted that so far there have been no problem in bringing in the finalized finances. In May, it was announced that SACE, Italy’s state-owned export credit agency, has allocated a credit line to Saman Bank, but the amount was not disclosed, according to Financial Tribune.
The combined $13 billion by Korean lenders is part of a recently unveiled agreement for which Iran’s Economy Minister Ali Tayyebnia traveled to Seoul on Saturday. It is to be allocated for Iranian projects such as Isfahan refinery, eight gas condensates refineries in Siraf and Asaluyeh, as well as a hospital, among others.
Khazaei, who is also a deputy economy minister, referred to a $400 million Indian finance, a part of which has been used in Chabahar Port, adding that “a €1 billion project for the construction of Bandar Abbas gas plant is also underway” without providing further details about the source of funds.
According to the official, FDIs from India and Russia have so far been finalized and “the Chinese finance for the Mashhad rail project is being finalized”. Last year, the government announced that it had approved the attraction of $11.8 billion in foreign direct investment during the 12 months to December 21.
Asked whether the finalized funds come with strings attached, the official said any FDI agreements, as per the order of Leader Ayatollah Seyyed Ali Khamenei, will only be signed under “normal circumstances”.
“It is the Iranian side’s persistence that sometimes prolongs negotiations with other countries and Iran would have been able to seal many deals much sooner if they had come with no ifs or buts,” he added.
Khazaei also denied any potential problems with companies insuring these foreign finances.
He admitted that at the beginning of the previous fiscal year (March 2016) and only months after the implementation of the nuclear accord, Iran faced problems because of its debts to foreign governments (incurred during the sanctions targeting the country’s financial system.)
However, “Iran’s debts with these institutions were cleared with the assistance of the Central Bank of Iran and the Ministry of Foreign Affairs” and the country refused to accept any extra fines that had been imposed as a result of late payment.
The official pointed out that credible investment insurance agencies such as the Korean K-SURE, Italy’s SACE, Germany’s Hermes, the Oesterreichische Kontrollbank and the China Export and Credit Insurance Corporation have now said they are ready to continue with insuring Iran investments under normal conditions.
Khazaei emphasized the significance of this new development by saying that after a rough period in which monetary and financial transactions were extremely difficult or non-existent, and the banking system was cut off from the world, “international institutions once again trust the country”.