French Mission Expected to Realign With New Iranian Gov’t

The Movement of the Enterprises of France (also known as MEDEF) and its local structure, CFAT (French Business Center of Tehran), are organizing a high-ranking business delegation to Tehran and Isfahan from 18 to 20 September 2017.

About 50 companies active in the fields of infrastructure, transportation, energy and environment will join the mission.

Heading the delegation will be Yves-Thibault de Silguy, vice chairman and senior lead director of Vinci and chairman of the French-Iranian Business Council. Jean-Baptiste Lemoyne, secretary of state to the minister for Europe and foreign affairs, will also be accompanying the delegation, MEDEF told Financial Tribune via email.

  Vinci to Invest in Iranian Airport Development

The French construction company Vinci SA began talks with Iran to develop Isfahan International Airport soon after the January 2016 implementation of the nuclear deal Iran signed with world powers in 2015.

“Vinci will invest $120 million during 36 months to build a new terminal for Isfahan’s airport,” the airport’s CEO, Hassan Amjadi, told Financial Tribune earlier this month.

“In the first phase, a 25,000-square-meter terminal will be built. It will be extended to 36,000 square meters afterwards.”

Isfahan International Airport annually handles more than 2.5 million passengers. The new terminal will increase this figure to 4.5 million. And once the second phase is complete, the capacity will reach 9 million passengers per year.

Amjadi said a few issues need to be resolved before the contract with Vinci SA is signed, including problems pertaining to land ownership, hoping the challenges will soon be overcome.

Vinci has reportedly signed a contract with Iranian firm Kayson Inc. to invest in the development of Mashhad International Airport as well as Isfahan’s. Unconfirmed reports published in the local media have put the agreement’s value at $404 million.

A 43,000-square-meter international terminal and a 25,000-square-meter domestic terminal will be constructed in Mashhad International Airport on the basis of a build-operate-transfer contract.

The annual capacity of Mashhad International Airport is estimated to reach five million passengers after the two terminals become operational.

Vinci signed a preliminary agreement with the government to implement the projects, after representatives of the European company participated in a business forum at Iran Chamber of Commerce, Industries, Mines and Agriculture’s headquarters on January 31 this year.

Former French foreign minister, Jean-Marc Ayrault, who was accompanied by a 100-member economic delegation, attended the forum.

  Priorities of New Iranian Gov’t

The aim of the upcoming French delegation, according to MEDEF, “is to meet with the recently appointed Iranian authorities and discuss the priorities of the new government”.

“MEDEF International hopes that this delegation will contribute to strengthen business ties between Iranian and French companies.”

Various ministerial meetings and networking sessions at the Iran Chamber of Commerce, Industries, Mines and Agriculture are scheduled to be held during the French delegation’s three-day visit.

This will be the second French delegation to visit Iran in 2017, the fifth since the first election of President Hassan Rouhani in August 2013 and the first major European delegation since the Iranian presidential elections of May 2017.

On September 20, the delegation will be in Isfahan to meet with officials, the Isfahan Chamber of Commerce, Industries, Mines and Agriculture and its member companies. A site visit to Isfahan City Center, the largest mall in Iran, is also planned.

Established in 1998, MEDEF is the largest employer federation in France. It has more than 750,000 member firms, 90% of them being small- and medium-sized enterprises.

Every year, MEDEF International organizes a number of delegations of French business leaders with tangible projects to visit targeted countries, especially the developing countries.

  France at the Forefront

France has been at the forefront of European countries resuming business ties with Iran after the nuclear deal.

According to a report by Muriel Penicaud, former director of the French Agency for International Investments, since the signing of the nuclear agreement, officials from more than 300 French companies have visited Iran and more than 2,000 companies expressed their wish to work with Iranian partners.

The biggest contract was signed by the oil giant Total: a more than 50% stake in an investment of about $4.8 billion for the development of an offshore gas field on the Persian Gulf.

Other important contracts have also been signed or are under negotiation: the sale of more than 100 Airbus aircraft, ongoing negotiations for the sale of about 40 medium-haul aircraft, PSA (Peugeot-Citroen) contracts with top Iranian automakers Iran Khodro and SAIPA, that of Alstom with the Iranian companies Industrial Development and Renovation Organization of Iran and Iranian Rail Industries Development Company, among many other joint-venture contracts in various fields.

And more recently, the Renault Group finalized a contract for a joint venture with Iranian carmakers on August 7.

According to the terms of the contract, 60% of the shares of the company created will be held by Renault, as the Iranian state company IDRO will hold 20% and 20% will go to Negin Khodro–the official dealer of imported Renault cars in Iran. The stated objective is to increase the production of different models of Renault vehicles to 150,000 units per year.

The result shows a 235% increase in trade between Iran and France in 2016, according to Michel Sapin, former economy and finance minister.

President Hassan Rouhani made Paris his first overseas destination after the nuclear deal was signed in July 2015. The high-profile visit was followed by those of two foreign ministers, Laurent Fabius and Jean-Marc Ayrault, as well as ministers of economy, transport, foreign trade, agriculture and higher education, to Tehran.

For the first time, France’s national agency for the international development of French businesses, Business France, is participating in the 11th International Exhibition of Plastics, Rubber, Machinery and Equipment, better known as Iran Plast 2017, from September 24 to 27.

Founded in January 2015, Business France is a public-private body contributing to meeting three economic targets: helping French businesses expand abroad; aiding employment and development by attracting foreign investors to France; and promoting France’s business image across the world.

Paris opened the first major European trade office in Tehran during the visit of a French delegation led by the Minister of State for Foreign Trade, Tourism and French Nationals Overseas Matthias Fekl and Minister of Agriculture, Food and Forestry and Government Spokesperson Stephane Le Foll in September 2015.

The Business France office, headed by Romain Keraval and located at the French diplomatic mission in Tehran, seeks to facilitate commercial relations between the two countries.