Economy, Business And Markets

Banking to Benefit First From Lifting of Sanctions

Banking to Benefit First From Lifting of Sanctions Banking to Benefit First From Lifting of Sanctions

The banking system will be the first to benefit from the lifting of sanctions if Iran and world powers agree to a final deal by the June 30 deadline, a report has predicted.

Financial and shipping sanctions will be gradually relaxed first, with restrictions on the oil sector suspended towards the end of 2015, Business Monitory International said in an April report.

The lifting of financial sanctions will facilitate the financing process and help attract foreign investment into the infrastructure projects, the report said.

It also said that the final deal, if reached, will be instrumental in attracting the much-needed investment in Iran’s ports sector, which has been in recession in the past decade. According to the Global Competitive Report of the World Economic Forum 2014-2015, Iran ranks 80 out of 144 countries for the quality of port infrastructure.

In the Financing Risk pillar of BMI’s Project Risk Index (PRI), Iran scores only 18 .8 out of 100, with a particularly weak score of only 5 out of 100 in the Cost of Financing subcomponent. Iran ranks 79 out of 82 countries globally in the PRI.

Russian and Chinese companies have a strong presence in Iran, but BMI predicted interest will increase from other international players, including South Korean companies such as GS Engineering & Construction, which has started surveying the Iranian market, looking for opportunities in gas infrastructure in particular.

Hyundai E&C and Daelim have currently operating offices in Tehran.

Furthermore, Arab, French, and Turkish companies are showing greater interest in returning to the Iranian construction market, the report said.

Iran and the P5+1 (the five permanent members of the UN Security Council plus Germany) have been in negotiations over Iran’s nuclear energy program for that past 18 months, with officials from all parties involved in the talks expressing hope that they would reach a final agreement by the end of June. If the deal is reached all nuclear-related sanctions imposed by the UN, US, and EU will be terminated in exchange for Tehran limiting part of its nuclear program.