The National Development Fund of Iran is making progress in collecting unpaid debts by private companies, a deputy with the sovereign wealth fund said.
In a press release seen on the NDFI website, Reza Mohammadi, head of the department for contracts and debts, said the fund was able to collect $2.5 billion owed by the private sector borrowers.
NDFI is independent of the government and was set up in 2011 to help reduce dependency on oil and save a percentage of the earnings from oil and gas exports for the welfare of future generations.
The fund lends to nongovernment public sector, private firms and cooperatives in need when government revenues are low.
Despite relative success in collecting the debts, Mohammadi said that the government remains the major debtor of forex loans taken from the NDFI.
“Despite the fact that most of the money was loaned to the government, the NDFI has been unable to collect arrears from the government,” he was quoted as saying.
The official did not give a breakdown nor provide figures on the government and private debt. However, inquiries by the semi-state news agency, ISNA, indicate that the NDFI’s outstanding loans is near $10 billion of which the government owes $6 billion and private sector the balance.
This is while the articles of association of the sovereign wealth fund explicitly mention that it must focus more on the financial needs of private companies and less on the government.
As per law, 80% of NDFI resources should be used to fund private company projects with non-governmental public entities using the rest.
The 2018 US economic sanctions have undermined the fund’s income while the government(s) have increasingly tapped into its resources for deficit spending and pay its bills.
Earlier in the month Mehdi Qazanfari, managing director of NDFI, sad the fund has invested $27 billion in oil, gas and petrochemical sectors, $13 billion in water projects, $5 billion in power plants and $1.5 billion in rural employment since its inception in 2011.
Pointing to shortage of resources, Qazanfari said the “fund would do better in investing rather than lending”.
In the 2022-23 budget the government is supposed to deposit 20% of its oil and gas export revenue with the fund.
