Economy, Business And Markets

Iran, Italy Mull $2b Joint Fund

Iran, Italy Mull  $2b Joint FundIran, Italy Mull  $2b Joint Fund

Italy’s sovereign wealth fund, Fondo Strategico Italiano, and the National Development Fund of Iran are negotiating the establishment of a joint fund worth $2 billion.

After meeting Safdar Hosseini, the NDFI chief, on Saturday as part of his visit to Iran, Maurizio Tamagnini, the head of FSI, appreciated the Iranian fund’s efforts in helping expand economic ties between Iran and Italy, ISNA reported

“Our plans for expanding ties with Iran follow three lines: The first is joint investment with Italian companies in Iran. The second is finding partners for Italian companies interested in investing in Iran and providing them with attractive options for investment in Iran. And the third is working with NDFI to invest in a joint $2 billion fund,” Tamagnini was quoted as saying.

The Italian official said his country’s top companies are prepared to invest in “supplying Iran with banking infrastructure services, developing process industries related to oil and gas, and modernizing Iran’s agriculture”.

Pointing to the upcoming visit of Italian Premier Matteo Renzi, Tamagnini hoped that the scheme for establishing the joint fund would be finalized in talks between Iran’s president and Italy's premier in Tehran.

Hosseini said NDFI’s share of oil and gas exports’ revenues had increased by “over 30% which, along with the lifting of international sanctions on Iran, have paved the way for the expansion of the fund’s international activities".

Ramped Up Investment

Pointing to the history of the two countries’ economic cooperation and the Italian businesses’ interest in post-sanctions Iran, Hosseini said, “NDFI is ready to help revamp foreign investment in Iran in the new era. The fund is completely ready to join Italian financial organizations for funding private sector projects in Iran and undertake joint investments in the two countries.”

The NDFI chief introduced attractive projects for investment to his Italian counterpart and said there are several projects in oil and gas, rail transport infrastructure and greenhouse production for which the NDFI can serve as a catalyst to bring in Italian finance.

Hosseini noted that with the easing of laws and regulations concerning NDFI, the stage is set for expanding the scope of its schemes.

“In the sixth five-year development plan (2016-21), NDFI will be free of pressures from budgetary and regular laws, and become more independent in managing its resources than in the past.”

Mohammad Saeed Nouri-Naeeni, NDFI’s deputy for economic affairs, said Iran’s agriculture-based economy needs modernization and new technologies specifically related with water.

“The Italian firms’ schemes for modernizing Iran’s agriculture can be appealing. Expanding exports in agricultural and industrial products are Iran’s major objectives in the post-sanctions era. The schemes suggested by Italians are worth considering,” Nouri-Naeeni said.

Iran and Italy signed €17 billion ($18.4 billion) worth of deals during President Hassan Rouhani's visit to Italy in late January.

Italy was Iran’s biggest trading partner in Europe before commercial ties dwindled as a result of sanctions. Since 2012, annual trade between the two countries declined from €7 billion to €1.2 billion. As much as 58% of Italy’s exports to Iran are in the mechanics sector, followed by chemical products at 8%.