Economy, Business And Markets

NDFI to Receive less From Oil Revenues

NDFI to Receive less From Oil Revenues
NDFI to Receive less From Oil Revenues

A lawmaker has said the country’s sovereign wealth fund known as the National Development Fund of Iran will probably get far less than its current share from the oil revenue throughout the next five years.

“The resources available to the NDFI are not used optimally and we need to revise the fund’s share from the oil revenue”, Mohammadreza Pour-Ebrahimi, a member of the parliament’s economic committee told Fars News Agency.

Pour-Ebrahimi emphasized that NDFI’s current strategy of allocating the resources to manufacturing sector should change.

He reiterated that reduction of NDFI’s share from oil revenues has been included in the plan of action to exit recession, adding that the move is very likely to accelerate the pace of economic recovery.  

The MP’s criticism comes in spite of the fact that, in one of its latest project finances, NDFI helped revive a polyethylene plant in the western province of Kordestan. The project will add more than 300,000 tons of low-density polyethylene (LDPE) to the national production capacity.

NDFI, which is independent from the state budget, was founded in 2011. According to Article 84 of the Fifth Economic Development Plan (2011–2015), the fund is tasked with helping spend part of oil revenue on the sustainable development plans.

The fund allocates 50 percent of its resources to the private sector, cooperatives and non-governmental sectors, 20 percent to projects involving foreign investors, and 30 percent on investment in stock markets overseas.

NDFI’s reserves stood at $24.4 billion in 2011 and $35 billion in 2012. The number reached more than $50 billion in 2013 and $64.8 billion in August 2014.

Last month, the government announced that the fund would allocated some $2.3 billion to anti-recession plans, as well as $10 billion to water management and agricultural development projects over a course of four years.