Economy, Business And Markets

EU Banks Mull $3b Credit Line for Iranian Bank

EU Banks Mull $3b Credit Line for Iranian BankEU Banks Mull $3b Credit Line for Iranian Bank

Bank of Industry and Mine is negotiating a $3 billion credit line with a consortium of six European banks, said the bank’s CEO Ali Ashraf Afkhami on Tuesday.

“The credit line will be used to boost BIM’s lending power, in line with plans to finance industrial units across the country,” the bank’s website quoted Afkhami as saying during a press conference on Tuesday

 “However, talks are not finalized yet,” he added.

Afkhami noted that BIM has allocated 9.7 trillion rials ($310.8 million at the market exchange rate) to 712 small- and medium-sized industrial units, since the beginning of the fiscal year.

“BIM has managed to establish ties with 57 foreign banks, since the lifting of the sanctions in January,” he said.

The BIM chief referred to a $400 million credit line from India’s Exim Bank and a $100 million credit line from South Korea as other achievements of his bank in recent months.

India’s Exim bank also extended a credit line worth $150 million to Iran in February for supplying 150,000 tons of rail tracks.  

Afkhami noted that of the 57 banks BIM has linked up with, 14 are based in the European Union.

BIM is also planning to attract credit for the development of a project to electrify more than 900 km of railroads between the capital Tehran and the northeastern city of Mashhad, “either from Chinese or European banks”, he added.

 EIH Bank

Elaborating on the performance of the Hamburg-based EIH Bank, of which BIM is a major shareholder, Afkhami said the bank has transferred about $5.5 million in the past five months.

“Before the lifting of sanctions, we had to pay 10-11% fees for the transfer of such amounts of money,” he said.

The Europaisch-Iranische Handelsbank AG in Hamburg restarted services to Iran on March 1, as the first European lender to do so after the lifting of sanctions. The bank allows customers to transfer money through its branches in Germany and Iran.

The lender has a German license, but is owned by the Iranian state. Iran’s Bank of Industry and Mine is the biggest shareholder with Bank Mellat and Tejarat Bank also owning stakes.

 Iranian merchants had founded the bank in the early 1970s to support trade between Europe and Iran. The bank’s activities had been frozen for five years, as the lender was hit with nuclear-related sanctions.