Norway’s GIEK Sees Iran Trade Opportunity

Officials from Export Guarantee Fund of Iran and Norwegian Guarantee Institute for Export Credits (GIEK) discussed expansion of ties during a meeting held this week in Tehran.

The Norwegian export credit agency aims to familiarize itself with Iran’s business ambiance in order to support Norwegian exports.

“Several Norwegian firms active in various businesses have shown interest in doing business with Iran,” Wenche Nistad, GIEK’s chief executive, told Financial Tribune on the sidelines of the meeting

“However, oil and gas is of high importance to us. Drilling vessels, drilling rigs and offshore services are what Norway has been exporting. I know seafood and fish could also be exported to Iran, but they are not normally among goods that we support.”

Nistad noted that GIEK basically deals with long-term finance.

“To learn more about Iran’s banking system and its operations is also among the main objectives of the trip,” she said.

“I know how sanctions prevented the development of Iran’s banking system. There are lots of regulations for banking operations in EU. I think Iranian banks need to learn how to deal with these regulations.”

The GIEK chief executive stressed that both sides have to learn more about each other.

Commenting on Norway’s $1 billion credit line for covering trade with Iran, Nistad said, “The plan is still in its early phases; more time is needed for starting such projects as we need to learn more about each other, know more about doing business with Iran and get familiar with Iran’s banking system.”

The credit line was granted to lran earlier in August during the visit of Borge Brende, Norwegian foreign minister, to Tehran.

Back then, EGFI and GIEK signed three memorandums of understanding to provide funds for development and infrastructure projects agreed between the two sides. The two agencies also agreed to expand ties in insurance, co-insurance and business data sharing.

“We also had the chance to discuss ties during Berne Union annual meeting,” she said.

Ivar Slengesol, director for lending at Export Credit Norway, and Anna Musiej Aanensen, senior vice president at Export Credit Norway’s Marketing Department, were also present at the meeting.

Kamal Seyyed Ali, the head of EGFI, told Financial Tribune that the visit of foreign export credit agencies to Iran is of high importance, as it helps clarify misconceptions about Iran’s business environment.

“I told the Norwegian team that we were among successful countries in attracting finances,” he said. “We also offered joint venture projects in neighboring countries like Iraq and Armenia.”

Seyyed Ali believes that Iran’s classified risk should be upgraded to 2 or 3, as “our country has considerable resources and low amounts of external debts”.

Back in June, the OECD upgraded Iran’s rating in the country risk classifications from 7 to 6.

“Unfortunately, political risk is given higher weight when it comes to Iran, while basically political risk accounts for approximately 30% of the risk,” he said.

EGFI is trying to persuade foreign export credit agencies to upgrade Iran’s risk classification during such meetings. Export credit agencies in Belgium, Russia and India have already upgraded Iran’s risk rating.

Credendo Group, Belgium’s export credit agency, upgraded Iran´s medium- to long-term political risk classification to category 5, back in October.  Seyyed Ali said EGFI covers the Iranian share of export-oriented projects implemented through a consortium of foreign financiers and export credit agencies.