The National Development Fund of Iran bought 20 trillion rials ($49.8 million) in shares since the beginning of the current fiscal year last March, head of NDFI Domestic Investment Affairs said.
“The NDFI ventured into the commodity market last year and bought shares of 10 companies,” Mohammad Javad Danesh was quoted by the Securities and Exchange News agency (SENA) as saying. He did not name the companies.
The sovereign fund is looking to expand its scope and invest $80 billion in upstream energy industries over the next decade, Danesh said.
“Some 90% of NDFI investments so far have been in energy and mining.”
The NDFI earlier received the go-ahead form its board of directors to broaden its investment scope earlier this year. In a meeting presided by President Ebrahim Raisi, the board approved proposals by the NDFI chief Mehdi Qazanfari.
“For the first time in its history, NDFI has been allowed to invest in diverse sectors, namely money and financial markets in and outside the country,” Qazanfari said.
NDFI is independent of the government and was set up in 2011 to curb dependency on oil export and save part of energy export earnings for future generations. It lends to the nongovernment public sector, private firms and cooperatives when government revenues are low. It reportedly manages $139 billion.
The fund said it has given $110 billion or 79% of its resources in loans to the government and private companies. Almost $74 billion went to the government and private firms borrowed the rest.
The fund holds $29 billion or 21% of its resources in cash. The Expediency Council approved changes to the NDFI articles of association in August. Changes were made to a range of issues, namely its share of government revenue from oil and gas export and financial management.
New provisions give the NDFI added leeway on how to spend its resources, become financially independent and gradually move away from the burden of plugging the government’s budget holes.
Under the new mandate the sovereign fund can set up a financial institution of its own. The institution is not allowed to branch out, accept deposits or issue money as regular banks.
Accordingly, the Central Bank of Iran is no longer in charge of managing NDFI accounts, which will be taken care of by the fund itself.
Last but not the least, authority has been given to the NDFI to expand its investment arm in and outside Iran including in development and infrastructure projects with low risk.
