Corporate News & Business

 

India hopes to complete work on first phase of Chabahar in 2018 (Tehran Times, 11 March 2017)

India is keen on expediting development of Chabahar Port in Iran and hopes to complete the first phase of the project in 2018, Shipping, Road Transport and Highways Minister Mr. Nitin Gadkari has said. Located in Sistan-Baluchestan province on the energy-rich Persian Gulf nation’s southern coast, the port is easily accessed from India’s western coast, bypassing Pakistan. For greater trade and investment flow with Iran and neighbouring countries, the cabinet last year had cleared proposals for development of Chabahar port including through a US$ 150 million credit from Exim Bank. It also authorised the Shipping Ministry to form a company in Iran for implementing the Chabahar Port Development Project and related activities. As per the MOU signed between the two nations in May 2016, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of US$ 85.21 million and annual revenue expenditure of US$ 22.95 million on a ten-year lease.
Ownership of equipment will be transferred to Iranian side on completion of 10-year period or for an extended period, based on mutual agreement. The Iranian side had requested for provision of a credit of US$ 150 million. Besides the bilateral pact to develop the Chabahar port, for which India will invest US$ 500 million, a trilateral agreement on transport and transit corridor has also been signed by India, Afghanistan and Iran.

Iran’s private Saman Bank entering mobile business (Financial Tribune, 11 March 2017)

Saman Bank through one of its new subsidiaries, Kish Cell Pars, is set to offer Mobile Virtual Network Operator (MVNO) services and sell SIM cards. Kish Cell Pars will offer Full MVNO services under a new brand name SamanTel. The new operator will use one of the country’s three traditional mobile operators; MTN-Irancell, RighTel or MCI to host its service. Saman bank is one of the first private banks in Iran. Founded in 2002, it has been at the forefront of modernizing the banking industry. The shift into the telecoms business is the first time the bank has moved out of its traditional financial industry. The company will also offer IPTV services, online and NFC payment services, messaging and voice calls.

Iran ranks 1st in automobile production growth worldwide in 2016 (Tehran Times, 11 March 2017)

Producing more than one million of automobiles in 2016, Iran could rank first among the world countries regarding the growth in its car production, according to the latest report released by the OICA (International Organization of Motor Vehicle Manufacturers). Iran managed to manufacture 1,164,710 automobiles in the said time, registering an 18.6% increase in number compared to the previous year, the report said.

Iran to abolish controls on iron ore pricing (Financial Tribune, 11 March 2017)

Iran’s Economy Minister Mr. Ali Tayyebnia has announced that Iran is set to lift government controls on iron ore pricing in the domestic market. He said that there is a large gap between domestic iron ore prices and international levels, which the government would address by amending the mechanism that determines prices for domestically produced ore. At present, exported concentrated iron ore is trading at $81/ton Bandar Abbas FOB, with the same material trading at 1.5 million/ton rials ($40/ton) in the domestic market, according to S&P Global Platts. Customs data showed iron ore exports experienced a sharp rise in the 11 months of the current Iranian year to February 18. The country’s miners exported 18.5 million tons of iron ore, 96.6% of which were shipped to China.

 

Tehran, Kiev ink MoU to enhance bilateral cooperation (Mehr News Agency, 11 March 2017)

On 10 March 2017, A Memoranda of Understanding (MoU) to boost mutual relations was inked between Iran and Ukraine. The document covers development of ties in several fields like agriculture, investment and finance, trade, chambers of commerce, industry and mining, steel making, machinery, geology, banking, oil, gas and petrochemicals, transportation, tourism, health, sports and the youth, communications as well as engineering consultation services.

 

 

Finance

 

Iran’s FATF membership by May 2017 (Financial Tribune, 11 March 2017)

The governor of the Central Bank of Iran Mr. Seif believes that the country will be able to meet the conditions needed to become a full-time member of the Financial Action Task Force when the organization takes up Iran’s case in May 2017. The intergovernmental FATF, which is the global standard-setting body for anti-money laundering and combating the financing of terrorism (AML/CFT), welcomed Tehran’s initiative to conform to its international standards in late June 2016 and called for a one-year suspension of restrictions. The CBI governor reiterated that regulations and standards required to become an FATF member do not call for sharing sensitive information, but are actions that ensure we will prevent money laundering within the banking system and not serve terrorists. In March 2016, the Iranian Parliament adopted an Anti-Money Laundering/Combating the Financing of Terrorism law and declared its high-level political commitment to implement an action plan. Since 2015-16, Iran has also became an observer in the Eurasian AML/CFT group following the adoption of a high-level action plan with FATF.

 

Austria’s Oberbank transacting with 21 Iranian banks (Mehr News Agency, 09 March 2017)

The CEO of Austria’s Oberbank Mr. Franz Gasselsberger is visiting Tehran at the head of a senior economy and trade delegation accompanied by Mr. Josef Pühringer, the Governor of Upper Austria. Mr. Gasselsberger said that Austria supports the enhancement of the credit ranking of the Islamic Republic of Iran. He added that based on agreements made between the two countries, good relations have been established and Austria’s Oberbank is now in communication with 21 Iranian banks. Mr. Gasselsberger emphasized that Oberbank is the only Austrian bank directly interacting and transacting with Iranian banks. He noted that Austrian companies are interested in developing cooperation with Iran and currently concerted talks are being held to broker new financial deals.

Iran banks to push for post-sanctions thaw (Press TV, 09 March 2017)

Three major Iranian-owned banks in Britain are reportedly planning to push the country’s banks to do business with them through a top regulating agency. The Wall Street Journal reported that Bank Sepah, Persia International Bank PLC and Melli Bank PLC were considering filing an arbitration case with Britain’s Payment Systems Regulator – the independent economic regulator for the payment systems industry in – to the same effect. This follows continuing reluctance by British banks to process transactions that involve Iran even thought the sanctions against Iran had already been lifted. British banks’ reluctance is explained by their lingering concerns about the poor standards of Iranian banks specifically with regards to issues such as money-laundering and financial fraud. To make big banks more comfortable, Bank Sepah, Persia International Bank PLC and Melli Bank PLC have joined forces to create their own “Radar List” of companies in Iran.

Oil & Gas

 

South Pars gas production to improve drastically (Mehr News Agency, 09 March 2017)

On 9 March 2017, Iran’s Oil Minister Mr. Bijan Namdar Zanganeh said that gas production had drastically improved in the last 4 years, almost doubling and soaring to 300 million cubic meters per day. He added that another 11 new phases are planned to start operation by the time the new cabinet assumes office in August 2017. Mr. Zanganeh also said that an ambitious plan to build 1000km of gas pipeline should receive investment to close the gap between utilities and the production platforms, adding that operation of each 56-inch caliber pipeline and the relevant pressurized systems will add another 110 million cubic meters of transfer of gas to the national grid. With drastically high as 600 million cubic meters per day of gas production, 6 such pipeline will be required to transfer gas from the south to extreme northern points of the country.

Russia considering annual purchase of 5mt of Iranian crude (Tehran Times, 09 March 2017)

On 7 March 2017, Russian Energy Minister Mr. Alexander Novak said that Russia is considering the purchase of up to five million tons (mt) of Iranian crude oil on an annual basis.

 

Economy & Society

 

Iran’s GDP growth forecast to rebound in 2016/17: IMF (Tehran Times, 10 March 2017)

The International Monetary Fund has forecasted that Iran’s real GDP growth is expected to rebound to 6.6% in 2016/17. Real GDP grew by 7.4% in the first half 2016/17, rebounding from recession in 2015/16. Meanwhile, higher foreign direct investment and a gradual improvement in domestic financial conditions drive investment and stronger non-oil sector growth. The current account is forecast to remain in surplus as higher exports offset the pick-up in imports related to investment. The country’s inflation declined to single digits and has hovered in the 9.5 percent range, year-on-year, since mid-2016.

 

Iran and Middle East could adopt fully renewable electricity systems (Lappeenranta University, 09 March 2017)

Iran can transition to a fully renewable electricity system and financially benefit from it by 2030. Researchers at Lappeenranta University of Technology (LUT) show that major oil-producing countries in the Middle East and North Africa (MENA) region could turn their abundant renewable energy resources into lucrative business opportunities in less than two decades. According to the study, a fully renewable electricity system (100% RE) is roughly 50-60 percent cheaper than other emission-free energy options for the MENA region. For example, new nuclear power costs around 110 euros per megawatt hour. Fossil-CCS option costs around 120 euros per megawatt hour. But the cost of the fully renewable energy electricity is around 60–40 euros per megawatt hour, based on financial and technical assumptions of the year 2030. The cost of wind and solar electricity would reduce further to 37-55 euros per megawatt hour if different energy resources were connected with a super grid that allows the transmission of high volumes of electricity across longer distances. For Iran, the price could go as low as 40-45 euros per megawatt hour. Transforming the electricity system fully to renewables for Iran requires 49 gigawatts of solar photovoltaics, 77 gigawatts of wind power and 21 gigawatts of hydropower. Most of the hydropower already exists, but the solar and wind capacities would require new investments.

By Natela Outtier