Repaying forex debt to the National Development Fund of Iran has improved in the past ten months, a member of the NDFI executive board said.
Alireza Mirmohammad-Sadeqi said companies paid $2 billion in forex debt from October 2021 up until last week. This is while the total repaid loans were barely $500,000 from 2018 to Oct. 2021.
“Forex debt settlement has grown four-fold in the past ten months,” he was quoted as saying by the NDFI website.
NDFI is independent of the government and was set up in 2011 to curb dependency on oil and save a percentage of the earnings from oil and gas exports for future generations.
In recent days, repayment of forex loans years ago has become a topic of intense debate among private companies and the NDFI.
Mirmohammad-Sadeqi said the long-pending forex debts are being paid mainly by three lenders, namely the Bank of Industry and Mine, Bank Mellat and Export Development Bank of Iran. These banks handled the NDFI loans.
“Among these banks, Bank of Industry and Mine has funded 200 projects for the private sector,” he said, adding that the bank still owes $1.6 billion.
Based on inquiries by local news outlets, NDFI’s outstanding loans are near $10 billion of which the government owes $6 billion and private sector the rest.
Reimbursing NDFI loans gained momentum after the sovereign wealth fund rejected calls by defaulters for settling debts at lower rates.
Last month the NDFI said it would resort to “legal methods” to recover its unpaid debts. Legal action includes seizing the property of borrowers in lieu of debts.
As per law, 80% of NDFI money should go for private sector projects and the balance to non-governmental public entities.
The NDFI recently said that it will focus more on investment and less on granting loans. Its board of directors earlier in the month gave the fund the go-ahead to broaden its investment scope.
According to a press statement seen on its website, the NDFI henceforth can invest in domestic and foreign financial markets.
The fund has said it is interested in investing in projects that bolster startups and products of knowledge-based companies. It also seeks to “concentrate on investment in infrastructure projects and sectors with high returns and low risk.”
The fund has said its resources should not be used for plugging government budget deficits or for development projects that compete with private enterprise as been the case for years.
In a recent report, the NDFI said it had invested $27 billion in oil, gas and petrochemical sectors, $13 billion in water expansion projects, $5 billion in building and rehabilitating power plants and $1.5 billion in rural employment schemes since its inception in 2011.
