It has been decided that multiple grace periods on unpaid loans will be discontinued, the National Development Fund of Iran (NDFI) said.
The rare decision came during a meeting between the NDFI board of trustees and President Ibrahim Raisi last week, the manager of Anti-Money Laundering and Regulation Adaptation Affairs of the sovereign fund said.
“Henceforth banking facilities [loan repayment] will be eligible for grace periods based on the progress of projects. As such, the approach will differ subject to whether the projects are “in progress”, “abandoned” or “launched”, Azam Houshangi was quoted by the NDFI news portal as saying.
The official said for projects in progress the NDFI will decide based on real needs and additional grace period results in the launching of the project. For abandoned projects “we will step in to either possess part of the project or collaborate in finishing them.”
“For projects that have already been launched, we will extend the grace period for loan repayment under the condition that they repay part of the NDFI money. If indebted companies later refrain from paying the rest of the debt, we will proceed as per regulations,” Houshangi said. She did not elaborate.
NDFI is independent of the government and was set up in 2011 to curb dependency on oil and save a percentage of oil and gas export revenue for future generations. The fund lends to nongovernment public sector, private firms and cooperatives in need when government revenues are low.
In recent months, reimbursing forex loans taken out years ago has become a hot button issue among private firms and the NDFI.
The latter insists that companies repay the loans in foreign currency and at the present market rates. Debtors want to repay at rates of the time they borrowed, referring to the steep rise in currency rates and rising production costs that have undermined their ability to repay at higher rates.
Most of the unpaid loans go back a decade ago when forex rates were much lower and the economy relatively stable.
Focus on Investment
“We have decided to create the conditions to transform NDFI resources into strong assets for future generations, turn rial holdings into financial of non-financial assets, commodities with high value added and low risks, and strong foreign currencies,” Houshangi said.
NDFI trusties have decided to invest in projects and activities that technically, financially, economically and environmentally viable to help safeguard the share of future generations, she noted.
Foreign investments, she added, is stipulated in the fund’s articles of association, yet it has yet to be realized, largely due to the US economic sanctions.
“The NDFI is determined to make foreign investments and has several options. We will solicit help from domestic and international investment firms and insurance companies.”
