Domestic Economy

Italian Delegates in Private Sector HQ

Italian Delegates in  Private Sector HQ
Italian Delegates in  Private Sector HQ

Iran and Italy signed 12 memoranda of understanding in the sectors of energy, steel, telecommunications, aviation and medicine during a trade forum held in Tehran on Wednesday.

The meeting was attended by visiting Italian Prime Minister Matteo Renzi and Iranian Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, as well as high-ranking officials and representatives of the two country’s public and private sectors, IRNA reported.

The MoUs were signed by:

- Tehran’s Union of Garment Manufacturers and Sellers and Italy’s Sistema Moda Italia to expand bilateral cooperation in textile and fashion industry;

- Iran’s Fahameh Industrial and Engineering Company and Italy’s IMQ;

- Iran’s BIS Company and Italy’s Danieli to construct a company worth €350 million with a capacity of producing 1.5 million tons of steel per annum;

- Iran’s BIS Co. and Italy’s Fata S.p.a to construct and help equip a 450-megawatt power plant in Kerman worth $237 million;

- Iran’s Mobarakeh Steel Company and Italy’s Marcegaglia to boost cooperation;

- Iran’s Telecommunications Company and Italy’s Italtel to set up telecoms network in Iran;

- Iran’s PATASA Investment Company and Italy’s Itway to cooperate in IT projects;

- Iran’s Jahan Pars Group and Italy’s Belleli Group to implement engineering project;

- Iran’s Airports Company and Italy’s Vitali Spa to reassess the infrastructure and design of Kerman Airport runway;

- Iran’s Shahid Beheshti University and Italy’s Stefano Boeri Architetti on urban development and research on Iranian architecture;

- And Iran’s Health Ministry and Italy’s Dimensione Spa Construction Company.

On the first day of the Italian premier's Iran visit on Tuesday, the two countries signed seven agreements, including but not limited to, plans for cooperation between Italian electricity and gas company Enel and the National Iranian Gas Export Company.

Enel said the MoU lays out details for possible cooperation involving natural gas, liquefied natural gas and related infrastructure. The agreement also entails information sharing, studies, analysis and training, “as well as exploring future opportunities for long-term supplies,” AP quoted Enel as saying.

Other deals include a car component agreement with Danieli Group, an agreement with the Milan Airports company to renovate a domestic airport in Tehran and another focused on promoting tourism.

Italy once ranked among Iran's top trading partners, with €7 billion ($7.6 billion) in trade before international sanctions were imposed on Iran over its nuclear programs. A landmark deal to remove those sanctions in exchange for limits on Iran's nuclear program went into effect in January.

“Before the sanctions, Italy was Iran's top trade partner in the European Union and today we want Italy to play that role again,” President Hassan Rouhani said during a ceremony to welcome the Italian premier.

Renzi's two-day visit was the first by an Italian leader since Giuliano Amato's in 2001. His trip follows a visit by President Rouhani to Rome in January, in which the two countries signed billions of dollars in trade deals.

"Iran is our first priority," said Licia Mattioli, vice president of the General Confederation of Italian Industry, commonly known as Confindustria.

"That 700 economic entities, 50 organizations, 20 banking institution and 1,200 businessman are now in Tehran shows the close collaboration between Italians and Iranians," she added.

> Financing Infrastructure Projects

Italian financing agencies have teamed up to give Iran nearly €5 billion in credit lines and guarantees for exports, in one of the most significant financial deals with the Islamic Republic since the landmark nuclear agreement that led to lifting of international sanctions, the Financial Times reported.

The Cassa Depositi e Prestiti, Italy’s state financing agency, which controls more than €350 billion in assets, will issue €4 billion in credit lines to Iranian public entities for them to fund big infrastructure projects such as railroads and motorways.

Italian companies such as Ferrovie dello Stato are expected to participate in those contracts.

Sace, Italy’s export credit agency, will support the transactions by providing €4 billion in guarantees for those deals and an additional €800 million in funding for Italian small- and medium-sized enterprises doing business in the country.

“This could be the most substantial development in resuming trade between Iran and Europe after the implementation day [of the nuclear agreement on Jan. 16],” said Majid Zamani, managing director of Kardan, an Iranian investment bank.

The credit lines issued by the Italian government are “a game changer and a very, very important development for Iran, by which development projects will start moving”, said a senior European businessman. “It will open doors to a long line of medium-sized European banks and businesses who were worried about the consequences of doing business with Iran.”

The credit lines could further encourage European and Asian Exim banks to finance Iran projects.

The Italian agencies will support trade through three private Iranian banks, namely Pasargad Bank, Parsian Bank and Saman Bank, according to an agreement made during a visit by President Rouhani to Rome in January.

The statement did not specify when the credit lines would be issued but one Italian official said “two very small transactions” had already taken place.