Economy, Business And Markets

Russia Considering $7b Loans to Iran

Russia Considering $7b Loans to IranRussia Considering $7b Loans to Iran

Russia is considering providing two loans worth $7 billion (£4.61 billion) to Iran, Russian Energy Minister Alexander Novak said in Moscow on Thursday.

Russia’s state Vnesheconombank (VEB) and Iran’s Central Bank are in talks on a 2 billion euro loan to Iran, while Russia and Iran are also in talks over intergovernmental loan from Russia to Iran worth $5 billion, Novak told reporters.

According to Russian Energy Minister Aleksandr Novak, Iran asked Russia for a loan of $5 billion for infrastructure projects, mostly likely power generation and the railroad development.

The loan is expected to boost trade between the two countries. The target is $10 billion, from the current $1.6 billion.

Novak visited Tehran in October, where he announced that Russia and Iran are considering setting up a bank to finance joint projects.

Iran’s deputy industry minister Mojtaba Khosrowtaj confirmed the $7-8 billion loan from Russia in an interview with Russia’s Sputnik news agency.

“Yes, we have reached a high-level agreement. Now it’s the work of the banks to agree on the technical details of this scheme”, he said.

Novak said Russia and Iran are discussing ways of making payments in national currencies.

“We are looking for different instruments to finance projects,” the minister said. “I mean use of national currencies, development of trade and balance that will enable forming sources for mutual settlements,” Novak added.

“I think we may reach $10 billion in the nearest future. We have a project in nearly every field,” the minister said.

Russia’s Zarubezhneft is interested in developing the Shangule oilfield in Iran.

Technopromexport, the subsidiary of the Russian state-owned Rostec corporation, will take part in implementation of energy projects in Iran. The agreement was signed on Thursday after the meeting of the Russian-Iranian intergovernmental commission in Moscow.

The loans announcement came as Iran’s Minister of Communication and Information Technology Mahmoud Vaezi was in Moscow at the head of a delegation of businesses to discuss ways to expand economic ties.

Sputnik news agency reported that Vaezi had discussed the issue of the loan with both the Russian Finance Minister Anton Siluanov and the head of the Russian Central Bank Elvira Nabiullina.

Other officials said the joint projects will mainly include the construction, by Russian companies, of infrastructure, transport, geological exploration and other facilities.