The government will repay $600 million as part of its foreign debt in the next fiscal year. The amount is projected in the proposed March 2020-21 budget bill, according to a press release of the Plan and Budget Organization.
Of the total, $166m will be paid to the Islamic Development Bank for loans Tehran received in 2012. Financial commitments of the Energy Ministry and its subsidiaries worth $244m are on the repayment list. The loans were taken for economic development projects.
Reimbursements include $64m owed to the OPEC Fund for International Development. Iran also has to reimburse part of its debt ($56m) to the World Bank. The remaining foreign financial commitment is related to other development projects.
The last report published by the Central Bank of Iran shows increase in external debt. It grew 7% at the end of the second quarter of the current fiscal year (June 21-Sept.21) compared to the end of Q1.
Overseas debts rose from $8.65 billion at the end of the first quarter of the current fiscal (started March 20) to $9.275 billion or up $620 million.
Medium and long-term debt rose slightly to $7.34 billion, but accounted for almost 80% of the total. The rise was mainly related to short-term borrowing, which was $1.92 billion on Sept. 21 up $1.49 billion reported in Q1.
The CBI report did not say why or how international financial commitments had increased given the tough US sanctions imposed on Iran’s entire financial sector.
Increase in external debt could be partly explained by Tehran’s efforts to raise funds for fighting Covid-19 in the first months of the plague.
Iran received $50 million from the World Bank to help the health sector cope with the coronavirus pandemic, a deputy health minister said earlier.
The OPEC Fund for International Development approved $500,000 in emergency grant to buy equipment to fight the deadly disease.
Iran has solicited multilateral development banks for funds, in which the country is a member, namely the Islamic Development Bank and the Asian Infrastructure Development Bank.
CBI’s request for a $5 billion emergency loan from the International Monetary Fund was turned down by the crisis lender under US pressure.
