The National Development Fund of Iran (NDFI) released a report on its performance since inception in 2011 up until the last calendar year that ended in March.
Deals to the tune of $119.2 billion were signed with banks during the 11 years. In the last fiscal (March 2021-22), $3.12 billion was allocated to nine lenders, the sovereign wealth fund said.
Up until March 318 projects borrowed $34.03 billion of which 311 were active, three fully reimbursed their debt and four projects folded. From the 311 projects, 309 opened LCs worth $28.7 billion and reported 71% progress until March this year.
An estimated 62% of the funding for the 300 plus projects were in the oil, gas, petrochemical and refinery sectors, 31% in industry and mining, and 7% in other economic sectors.
The NDFI report said 53% of the funding was in the non-government public sector and 63% in private and cooperative sectors.
From fiscal 2012-13 to 2017-18 the NDFI deposited $7.24 billion in banks. Close to $5.5 billion of this amount was given out in loans to 46 projects, 98% of which were in the oil/gas sector and the rest industry and mining.
Deprived regions got 77% of the loans and the remaining were in relatively privileged areas.
No deposits were made by the fund between 2018 and March 2022, the report noted without elaboration.
Rial Loans
NDFI signed contracts worth 211 trillion rials (more than $530.8m) with lenders from 2011 to 2015. Over the same period banks released 118.8 trillion rials ($298.8m) to finance 13,000 plus projects across the country.
The report said from 2015 to early 2022, the NDFI deposited 754 trillion rials ($1.89b) with banks. Up until March 20, an estimated 69% of this amount was given in loans to 107,000 projects. Overall, 57% of the loans went to industrial/mining projects, 26% for water and agriculture, 10% to processing and 7% tourism.
NDFI is independent of the government and was set up to curb dependency on oil and save some of the earnings from oil and gas exports for future generations.
Mehdi Qazanfari, head of the NDFI board announced plans for raising transparency in the fund's operations. “I have urged my colleagues to interact with the media and [regularly] inform the public on the performance of the fund. Since NDFI resources belong to the people, data on the use of resources and how to access it must not be the privilege of a selected few.”
The official said the fund collected $5.5 billion from the $7 billion in unpaid loans. “Now that almost 75% of the debt has been repaid, we are interacting with power plants to repay their outstanding loans.”
He was hopeful that the pending amounts would decline below $500 million before the yearend in March.
Due to shrinking oil revenues input into the fund has declined and government(s) have increasingly approached the key lender for funds to plug their deepening budget holes.
On its future course of action, the fund has said it is looking closely at startups and knowledge-based companies. It also intends to “concentrate on infrastructure projects and sectors with high returns and low risk”.
The fund has stressed that it wants to avoid lending to government(s) running endless deficits, give money to development projects or businesses that compete with the private sector.
