Corporate News & Business

 

Iran earmarks US$ 52billion to attract Iranians living abroad(Financial Tribune, 01 March 2017)

Iranian lawmakers have added a new article to the budget for the upcoming fiscal year (March 2017-18) to attract US-based Iranian expatiates and their investments. Based on the article, the legislators urged the government to provide US$ 52.92 billion to the Ministry of Science, Research and Technology and the Ministry of Economic Affairs and Finance to recruit Iranian nationals living in the US and attract their investment. The move came after the administration of new US President Donald Trump imposed new sanctions on Iranian entities and individuals, and included Iran in Washington’s travel ban on seven predominantly Muslim countries. Five to seven million Iranians are estimated to live in other countries, a majority of whom are the country’s scientific, cultural and economic elites. Out of 3,200 top science champions in the world, 24 are Iranians. In March 2007, Majlis Research Center, citing National Elites Foundation, put the capital assets of Iranian expatriates at over US$ 1.3 trillion and those of Iranian-Americans alone at over US$ 900 billion.

Kyrgyzstan plans to beef up meat exports to Iran(Financial Tribune, 01 March 2017)

Krgyzstan plans to export over 350 tons of meat to Iran in 2017 announced by Mr. AltynbekOrozbekov, Director of the State Agency for Promotion of Investments and Exports under the Ministry of Economy of Kyrgyzstan. In 2016, Kyrgyzstan exported 150 tons of frozen meat to Iran. In Tehran, Mr. Orozbekov met with local companies to discuss further supplies of Kyrgyz meat to Iran, as well as logistical issues. The implementation of investment projects in the field of construction in Kyrgyzstan was also discussed during the meetings.

Iran to ink 6 weighty contracts in auto industry(Mehr News Agency, 28 February 2017)

Head of Energy Committee of Tehran Chamber of Commerce Mr. Mansour Moazami has announced that six major contracts in automotive industry will be finalised with foreign investors by 21 March 2017. He underlined that the contracts will mark a turning point in the country’s auto-making industry as the nation will gain access to vehicles with state-of-the-art quality and standards by the end of 2017. The official also reported on signing of a €70 million contract between Iran and Belgium to manufacture automatic gearboxes inside the country. He added that by inking a deal with Saipa, Citroen is to make a US$ 160mn investment in Iran in the form of a 50-50 venture. Mr. Moazemi also pointed to the agreement between IMIDRO and France’s Renault saying that the French side enjoys 60% of the share in the contract while the rest belongs to the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO). Worth 900 million euros, the contract will officially come into force as of 05 March 2017, with the opening of a joint venture between the two sides. As a result ofthe six new contracts in the country’s auto industry, an aggregate total of US$ 3 billions of foreign investment will be attracted.

ShahidRajaee Port boosts activities by 35%(Mehr News Agency, 28 February 2017)

Managing Director of Iran’s Ports and Maritime Organization (PMO) Mr. Mohammad Saeidnejad said that implementation of the Joint Comprehensive Plan of Action (JCPOA) has paved the way for the purchase of required port equipment. He noted that the volume of activities in ShahidRajaee Port Complex has increased by 35% in the past 11 months. He deemed expansion of oil terminals as a major priority for PMO asserting that financial resources have been supplied to the project while contractors will be chosen by the end of the current Iranian year (to end 21 March 2017). Situated in Bandar Abbas, ShahidRajaee Port connects to more than 80 ports worldwide and the highest rate of cargo transit through the country and towards the Central Asia goes through this port.

CCR to supply metro cars to Iran(Railwaypro.com, 27 February 2017)

A China Railway Rolling Stock Corporation subsidiary will supply, this May, new rolling stock to the city of Mashhad. Currently, there is only one rail transit line in operation, the 19-km Metro Line. CRRC Changchun Railway Vehicles Co will supply 100 metro cars for Metro Line 2 in Mashhad, the second-biggest city of Iran. CRRC Changchun completed trial operations of the Mashhad metro line in February 2017. CRRC Changchun said that Metro Line 2 in Mashhad is just one aspect of the company’s business in the country. It already started to ship metro cars to Iran in 2016 after it signed a USD 1.39 billion contract to supply 1,008 metro cars to Tehran, over a five-year period. Iran plans to open 30 urban rail lines in nine cities over the next five years, with a total length of 350 kilometers. The demand for rail vehicles is expected to reach 2,000 subway cars. The 14-km Metro Line 2 in Mashhad is scheduled to be operational in May, connecting the north and south of the city. There will be transfer stops between metro lines 1 and 2, expanding the city’s rail transport network. Apart from the first three sets of metro cars shipped from China, the remainder will be manufactured in a joint venture formed by CRRC Changchun and a rail vehicle manufacturing company in Tehran, which was established in 2016.

DS in Iran(Repubblica.it, 27 February 2017)

The French brand has expanded its range in Iran with the official presentation of the DS3 at the show in Tehran. The French premium brand DS, which made its first on the Iranian market last year in partnership with Arian Group, presented to Tehran Motor Show its new DS3. The DS3 is in addition to the current range of the brand in Iran, which includes the compact SUV DS6 and the two sedans and DS5 DS5 LS.

Finance

50 SMEs referred to IFB for funds(Financial Tribune, 01 March 2017)

To generate financial resources from the capital market, 50 small- and medium-sized enterprises have been referred to Iran Fara Bourse. Iran’s Deputy Minister of Industries, Mining and Trade Mr. Ali Yazdani said that eight SMEs had already been accepted. Iran Fara Bourse over-the-market exchange set up a platform for trading the shares of small- and medium-sized enterprises in December 2016. Iranian SMEs, which account for more than 90% of all companies across the country, but have a small share in gross domestic product. According to Mr. Yazdani, who is also the chairman of Iran Small Industries and Industrial Parks Organization, 88,000 certified small businesses account for 42% of employment and 17% of production in Iran’s industrial sector. Deputy Head of Iran’s Small Industries and Industrial Parks Organisation FarshadMoqimi said that small- and medium-sized enterprises have attracted US$1.84 billion in foreign direct investment since President Hassan Rouhani took office in August 2013, of which US$ 653 million have been invested since implementation Iran’s nuclear deal in January 2016. Since Rouhani became president, foreign investors have signed 47 contracts to establish small- and medium-sized industrial firms, creating 2,740 jobs. These contracts have been signed with Turkey, Azerbaijan, Ireland, Japan, Iraq, Afghanistan, Croatia, China, Germany, France, Turkmenistan and the UAE. Of all the agreements, 25 projects have become operational and the rest are either under construction or their machinery are being installed.

Most NPLs constitute doubtful debts(Financial Tribune, 01 March 2017)

The banking system’s non-performing loans have reached US$ 30 billion, 60% of which are considered doubtful debts said Head of Monetary and Banking Committee at the Expediency Council Mr. AsgharAbolhassani. He added that the banking system currently shoulders about 85-90% of the financing and it seems that this will continue into the upcoming Iranian year (20 March 2017-20 March 2018). The official added that the projected figure in the sixth five-year development plan (2017-2022) for the capital market’s share in financing is US$ 40 billion while the amount for the next Iranian year has been set at over US$ 10.5 billion.

Iran and Indonesia to open joint bank account (Financial Tribune, 01 March 2017)

The establishment of a joint bank account between Iran and Indonesia will foster financial cooperation and facilitate bilateral transactions, said the Central Bank of Iran (CBI) Governor Mr. ValiollahSeif. Based on this system, both countries can open a bank account in each other’s central banks to facilitate the payment process. He noted that these accounts will be used only to settle bilateral trade deficit or surplus every 3 months.

Oil & Gas

Total discusses investment in Iran’s LNG project(Challenges.fr, 27 February 2017)

Total is discussing a multi-billion dollar stake in an Iranian liquefied natural gas export project, not yet completed. The French company was the first of the international majors to sign contracts in Iran after the lifting of Western sanctions against the Islamic Republic. Total now wants to invest in Iran LNG with a discount, at the rate that prevailed before the sanctions, in exchange for relaunching the project. Iran shares with Qatar the largest gas field in the world. The Iranian part of the field called South Pars, contains more than 14,000 billion cubic meters of gas, according to the website of the Pars Oil and Gas Company. Iran hopes to raise its gas production to 1,000 billion cubic meters by 2018, up from 160.5 billion cubic meters in 2012, before the most recent sanctions come into force. However, it does not currently have any capacity for cooling the gas, which is necessary to transform it into liquid in order to load it on ships.
About US$ 2.3 billion have been invested so far in the Iran LNG project, whose construction is more than half completed. The total investment to run the site could reach US$ 10 billion.

Economy & Society

Iran’s ‘impressive recovery’ clouded by ‘uncertainty,’ IMF says(Bloomberg, 28 February 2017)

The Iranian economy has had an impressive recovery following sanctions relief last year, though uncertainty regarding the fate of the nuclear deal and relations with the U.S. threaten to undermine it, the International Monetary Fund said. In a report released on 27 February 2017, the IMF expected growth to be 6.6% in the calendar year ending 20 March 2017, reflecting the rebound in oil production and exports, and then to stabilise at 4.5% over the medium-term as the recovery broadens. It also highlighted the government’s ability to maintain inflation in single digits and stabilize the foreign exchange market. The IMF warned that if the 2015 nuclear agreement is derailed, the economy could risk recession. While President Hassan Rouhani has highlighted benefits derived from the nuclear deal, including a doubling of oil exports and a more welcoming climate for foreign investors, his administration is also mindful of potential shortcomings caused partly by remaining U.S. sanctions that have deterred international banks’ involvement with Iran and complicate project financing. Foreign investment has fallen short of the US$ 50 billion a year expected by officials. That creates a risk for Rouhani, who faces a presidential election on 19 May 2017 with many ordinary Iranians yet to feel the benefits of the recovery. Political uncertainty underlines the need to advance reforms to lessen Iran’s reliance on oil and develop the private sector, the IMF said. It advised that priority be given to the restructuring and recapitalization of banks to sustain financial stability, fund growth and alleviate liquidity pressures.

Sistan and Baluchistan to reap outcomes of Makran development(Mehr News Agency, 28 February 2017)

Iran’s President Mr. Hassan Rouhani arrived in Zahedan on 28 February 2017 to inaugurate the Iranshahr-Zahedan gas pipeline project. He said that the government has a priority to develop Makran coasts, pointing to the trilateral agreement with Afghanistan and India as an example. With projects implemented in Chabahar and Makran in general, Mr. Rouhani promised concrete changes would thus be felt in the lives of the province’s inhabitants. The port of Chabahar is to have a capacity of 8.5 million metric tons to handle imports and exports. He concluded that Sistan and Baluchistan is a strategic province in that it is the only province providing Iran with a path to the Indian Ocean.

 

Germany is cooperating with Iran in climate and environmental protection (Solarify.eu, 27 February 2017)

By 2018, the Iranian Agency for Renewable Energies SUNA aims to a total of 5 GW wind and solar power. To achieve this goal, Germany and Iran want to work more closely together. This cooperation, as well as environment and climate protection were the main subjects of political talks, with during the visit of Germany’s Environment Secretary Mr. JochenFlasbarth to Tehran on 24-27 February 2016. The Federal Government wants to help Iran to cope with central environmental problems, such as water scarcity and air pollution. In addition, the German Ministry of the Environment wants to support Iran in implementing its national climate protection targets.

 

By Natela Outtier