Economy, Business And Markets

Qeshm Co. Nurtures Financial Hub Plan

Qeshm Co. Nurtures Financial Hub PlanQeshm Co. Nurtures Financial Hub Plan

Iran plans to set up a financial center in the Qeshm Free Zone as it seeks to attract overseas financial institutions to the market of 80 million people.

Chinese and Russian banks are seeking to set up representative offices in the area, Farhad Taghizadeh-Hesary, senior adviser to the Qeshm Investment and Development Co., said in an interview with Bloomberg. One of Japan’s largest banks is also negotiating with officials on establishing a presence, he said, declining to identify the banks. “The aim of this financial center isn’t to look onto Qeshm, but to be a window onto the mainland.” he said by phone. “There is much interest to enter Iran.”

Iran’s economy has traditionally relied on oil revenue and consumption by the internal market. That market provides opportunities for retail banking and project finance as the country vies to overhaul its infrastructure and spend billions of dollars expanding airports, transportation links and its energy sector after the lifting of economic sanctions in January. The International Monetary Fund expects Iran’s economy to expand 4% in the 12 months to March 2017.

 “We have lots of feasible projects in different sectors that are interesting to foreign investors,” Taghizadeh-Hesary said. “However, one of the bottlenecks is the lack of access to cheap finance. The financial center can help us access cheap finance,” he said. Iran’s banks are financially under pressure because of the lack of access to international capital,” said Payam Afzali, managing director and head of investment banking at Kian Capital, a Tehran-based investment banking and asset management firm. “They’ve had to take the burden of financing the country’s economy for a prolonged time, so they are under pressure,” he said.