The National Development Fund of Iran, the sovereign wealth fund, manages $139 billion, head of the NDFI Statistics and Planning Department said.
“Since inception in 2011, the fund has handled assets worth $139 billion,” Mohammad Mehdi Bakhshi was quoted as saying by the fund’s public relations website.
“The funds were used for different [economic] sectors”.
NDFI is independent of the government and was set up in 2011 to curb dependency on oil exports and save a percentage of the energy export earnings for future generations.
It lends to nongovernment public sector, private firms and cooperatives when government revenues are low.
According to Bakhshi, the NDFI has given $110 billion in loans to the government and private sector, which was 79% of its resources.
Out of the total lending, it gave $74 billion to the government while the private sector borrowed about $36 billion.
“The fund holds $29 billion or 21% of its resources in cash,” the official said.
With average 0.5% interest earned during history of lending, the NDFI generated close to $7 billion in operating profit.
“Repayment of loans started three years ago and NDFI profits are expected to increase in coming years as more borrowers settle their dues,” Bakhshi said.
Earlier, Reza Mohammadi, head of NDFI’s department for contracts and debts, said the fund was able to collect almost $2.5 billion from private company borrowers.
A Big Challenge
Collecting debts, however, is one of the biggest challenges the fund continues to face. This is particularly with loans to the government as well as forex loans taken out by the private sector.
Despite relative success in reimbursing private sector debt, the government still is the major forex debtor.
Based earlier inquiries by ISNA, the value of NDFI’s outstanding loans is $10 billion, out of which the government owes $6 billion and private sector $4 billion.
The NDFI recently announced a policy shift and said that henceforth it will focus more on investing rather than giving loans. Its board of directors earlier in the month gave the go-ahead to broaden its investment scope.
According to a press statement on its website, the NDFI will plans to invest in domestic and foreign financial markets.
Outlining the investment options, the NDFI said it is interested in investing in projects that support startups and in knowledge-based companies.
The fund also intends to “concentrate on infrastructure projects and sectors with high returns and low risk”.
Among activities the fund says it wants to refrain from are lending to government(s) running huge deficits, development projects enshrined in the national budget and involvement in businesses that compete with the private sector.
