Chinese Bank to Finance Petchem Project in Iran

The Oil Ministry has approved a proposal by the Industrial and Commercial Bank of China for financing the development of Mehran Petrochemical Complex in Ilam Province, said a local official hoping for the quick implementation of the plan.

“An estimated 41 trillion rials ($1.27 billion at the official exchange rate) are needed for the development of the project. ICBC has agreed to provide 85% of the amount, while shareholders of the project will provide the remaining 15%,” Heidar Nemati, director of Ilam provincial investment department, was quoted as saying by IRNA.

“A letter of intent was signed between the Mehran complex and the Chinese bank.”

Mehran Petrochemical Complex’s output will include propylene, phenol formaldehyde resin, polyol and acrylic acid.  

Back in April, the domestic media reported that China National Technical Import & Export Corporation had also agreed to invest about $1.9 billion in Mehran petrochemical plant. 

“Upon the completion of the petrochemical complex, Iran will no longer need to import raw materials for its downstream petrochemical and polymer industries,” Nemati said, noting that the plant will create 1,000 jobs. 

Earlier this week, Central Bank of Iran officials announced that the Chinese banking giant is taking steps for starting operations in Iran, although it was not clear whether ICBC is planning to open a branch or a representative office in Tehran. 

With total assets worth $3.616 trillion, ICBC is the top lender on The Banker’s Top 1,000 World Bank rankings for 2016 and first on the Forbes Global 2,000 list of the world’s biggest public companies in 2016.  It is one of China’s top four state-owned commercial banks. 

Bank of China, another member of the big four club, has also expressed willingness to enter Iran and open a representative office.