Economy, Business And Markets

EDBI Prepares for Post-Sanction Era

EDBI Prepares for Post-Sanction EraEDBI Prepares for Post-Sanction Era

Iranian businesses are preparing for a jump in activity following the lifting of sanctions against Iran over its nuclear energy program.

As foreign investors and fund managers scour Iran for investment opportunities, both short-term and long-term, Iranian businesses are preparing for normalization of relations with the outside world.

To help businesspeople in this regard, Export Development Bank of Iran is working to restore ties with foreign counterparts.

The credit agency was cut off from foreign business following the Central Bank of Iran’s expulsion from SWIFT global interbank messaging network, as the CBI was unable to clear the foreign transactions of Iranian banks.

Now, the lender has set up a committee to pave the way for the reestablishment of ties with international players as soon as sanctions are lifted. The announcement was made by the bank’s chief executive on Wednesday.

“EDBI used to enjoy cooperation with 400 international brokerages before the sanctions were imposed against Iran’s financial sector,” Ali Salehabadi said, as reported by IRNA.

He said sanctions relief, at any level, could facilitate certain activities.

“If the possible agreement between Iran and the West can remove the ban on the flow of foreign funds into the country, many key national projects could be financed, and if the banking transactions are normalized less cost would be incurred for money transfer,” he said.

Iran and the six world powers, known as the P5+1, are hoping to reach a final deal by the end of this month that would lead to a lifting of sanctions against Iran in exchange for Tehran limiting parts of it nuclear energy program.

Salehabadi said the bank has already developed different scenarios in case sanctions remain in place.  In the absence of foreign financing, key projects will be funded using the resources of the central bank and National Development Fund or Iran.

EDBI is an export credit agency. It is totally owned by the Iranian government, which provides financing and risk management services to exporters and investors who have permanent representatives in regional and international markets.

Regardless of its contingency plans, the Tehran-based lender will face hard times if nuclear negotiations are extended. However, if sanctions are lifted, business will intensify.