EDBI Ready to Support Petrochem Projects

The Iranian petrochemical industry has the capacity to receive significant new investments from banks, the chief executive of the Export Development Bank of Iran said, adding that his bank is ready to support the industry.

“The petrochemical industry is one of the generative pivots of the economy and supporting it is of paramount importance. In line with this, EDBI is ready to allocate loans and assists development projects in this industry,” Ali Salehabadi also told IBENA.

Stating that petrochemical projects are wider in scope compared with other projects that require investments from banks, the official noted that banks currently have limited resources and are unable to support it appropriately.

Salehabadi said Kermanshah Petrochemical Industries Company, Tabriz Petrochemical Company, Fanavaran Petrochemical Company, Kermanshah Polymer Company, Marun Petrochemical Company and Zagros Petrochemical Company have so far received credit from EDBI.

 On why the capital market struggles to finance the petrochemical industry, the CEO noted that the stock market has been able to lend a helping hand to the industry by releasing Salaf Islamic bonds through the energy exchange, but the main requirement is for petrochemical companies themselves to embrace the capital market and its instruments.

As an example, Salehabadi referred to the Persian Gulf Holding Company as one of the companies that was able to provide a portion of its financial resources through Arman Investment Bank by publishing Salaf bonds.

“The banks’ ability to participate in petrochemical projects depends on their level of capital. With the development of Makran Port, exports of petrochemical products would jump significantly,” he said.

According to the official, the port is currently capable of loading 2.5 million tons of products, but when its development project is completed with the help of EDBI, its capacity will increase to 8 million tons.

Noting that the World Bank has committed $340 million to this project, Salehabadi said $18 billion worth of petrochemical projects have currently been designated in the region “only for exports”.