The Bank of Industry and Mines is the first commercial bank to draw from the recently established Sino-Persian credit line to finance large infrastructure projects around the country.
The credit line was worked out between Iranian and Chinese officials, in order to use $27 billion of Iran’s locked oil revenues. The funds cannot currently be transferred back to Iran due to ongoing sanctions placed over Iran’s nuclear program.
The Sino-Persian credit line is being used to fund $2.3 billion worth of steel production projects, according to Ali-Ashraf Afkhami, the lender’s CEO.
In the future, a new line of credit will be opened to fund the construction of Tehran-Qom-Esfahan express railway, which has been touted as the first high speed rail network in Iran.
“The Bank of Industry and Mines is the only bank that works to support industry and manufacturing,” Afkhami said, but it lacks adequate capital to effectively do so.
Two of Iran’s commercial lenders have begun to finance projects from the resources provided by Sino-Persian credit line.
Asadollah Asgaroladi, head of Iran-China Joint Chamber of Commerce, told press about the commencement of the arrangement on Nov. 25.
The upper limit of the Sino-Persian credit line will be around $40-44 billion, said Asgaroladi, “which is twice the $22 billion debt China owes Iran for previous oil and gas deliveries.”
The two sides have agreed that the Chinese side finances the Iranian projects to clear its debts.
The Bank of Industry and Mine is a state-owned specialized bank. It is mandated to help increase economic growth via development of industry and mining. The lender aims to promote the participation of the private sector in the fields of industry, mining, modern technologies and their associated services.
Iran has over $100 billion in frozen overseas assets due to financial sanctions.
