Export–Import Bank of Korea (KEXIM) and Korea Trade Insurance Corporation (K-SURE) will provide $13b credit for Iran projects
Export–Import Bank of Korea (KEXIM) and Korea Trade Insurance Corporation (K-SURE) will provide $13b credit for Iran projects

Iran Says $13b Korean Finance On the Way

Iran Says $13b Korean Finance On the Way

Minister of Economic Affairs and Finance has confirmed local media reports of an imminent South Korean $13 billion credit line to support Iranian projects–a measure, which if finalized, will mark the biggest instance of foreign finance for the country since the implementation of the nuclear accord in January 2016,

Persian-language Sharq, a leading reformist newspaper, had published an exclusive report on Tuesday saying that Economy Minister Ali Tayyebnia would travel to Seoul within the next month in order to formally attend an event to complete the procedure, citing an unnamed "credible source".

In a talk with Fars News Agency on Friday, Tayyebnia confirmed that the credit line is aimed at financing Iranian projects and "we have been negotiating regarding the quality of a trade agreement and the details of guarantees".

Noting that "fortunately th e positive results would be achieved gradually", he added that the credit line is in no way related to Iran's oil income and will be provided in its entirety by South Korea.

Almost all the key details of the credit line have been reportedly agreed upon, and the Korean government has given the green light, based on which $8 billion will be provided by Export–Import Bank of Korea (KEXIM) while the Korea Trade Insurance Corporation (K-SURE) will account for the rest.

According to Sharq's source, $1.7 billion of the Korean finance will be allocated to the Isfahan refinery with another $3 billion going to the construction of eight gas condensates refineries in Siraf, Asaluyeh region.

Hyundai Motor Company, Daelim and Chiyoda Corporation "are meant to build these eight refineries as a consortium" in which Hyundai holds a 34% stake with the other two companies each holding a 33%. Eight Iranian consortiums which had started work on the projects before will remain the employers.

Executives with the Siraf Refineries Complex, which is owned by Iranian consortiums and who are overseeing the construction of the refineries, are reportedly in the final stages of negotiations with the Korean lenders and construction is set to begin from September 23 while the first payments will be made by late summer.

Unspecified amounts have also been reportedly earmarked for ethane extraction in phase 12 of South Pars Gas Field and building "an equipped hospital", the location and capacity of which is unknown as of yet .

FDI Turnaround

If the Korean funds do in fact find their way to Iran as predicated, it would mark a significant milestone for the administration of President Hassan Rouhani who has come under fire by his opponents, who assert that the nuclear deal has failed to yield any economic rewards for the country. 

The deal could also help alter the extremely cautious stance taken by major regional and European banks who have so far refrained from engaging Iran for fear of US penalties and potentially high risk of investment.

According to the World Investment Report 2017 released by the United Nations Conference on Trade and Development (UNCTAD), Iran received a total of $3.372 billion in foreign direct investment in 2016. The country's inward FDI in 2015 stood at $2.050.

Referring to the report, the director of the Organization for Investment, Economic and Technical Assistance of Iran, affiliated with the economy ministry said in a recent talk that last year, an "unprecedented volume of requests for investment in Iran were registered" and the organization, in tandem with other related entities, managed to finalize many of their negotiations in this regard.

"We approved more than $10.4 billion in investments [in 2016-17] and issued guarantees for them unprecedented in the history of the organization," Mohammad Khazaei added.

In his remarks, Tayyebnia also said that the finance contract with South Korea will not in any way be affected by the decision that is to be made by the Financial Action Task Force in the coming days, which is to pass judgment on whether or not Iran will be taken off of its blacklist of countries that do not adequately adhere to its standards of fighting money laundering and combating financing of terrorism.

The economy minister also referred to the finance deal with China, saying "there have been problems regarding guarantees and international licenses which will be resolved by way of negotiations".

Short URL : https://goo.gl/KKSxN5
  1. https://goo.gl/Z15esU
  • https://goo.gl/yiB8wL
  • https://goo.gl/ZxKMjF
  • https://goo.gl/fDjGYc
  • https://goo.gl/qY2Dfq

You can also read ...

Tehran, Seoul Sign MoUs for Technology Transfer
Iranian and South Korean private companies signed 22...
Bank Maskan Ready to  Issue MBS Worth $240m
Iran’s agent bank of the housing sector has notified the...
With a 37-kilometer coastline alongside the Persian Gulf, Bushehr accounts for about half of Iran’s maritime trade.
A total of 25.5 million tons of non-oil goods, including gas...
Tax Revenues at $19 Billion
As much as 1,000 trillion rials ($23.8 billion) had been...
8-Month Auto Output
The automotive industry is the second most active industrial...
Metal Exports Earn $2.5b in 7 Months
Iran exported 5.78 million tons of metallurgical products...
Nissan Prepares for Public Tests of Driverless Taxi
Nissan Motor Co and Japanese gaming software maker DeNA Co say...
Mohammad Mehdi Behkish, secretary-general of the Iranian National Committee of the International Chamber of Commerce, addresses TCCIM’s annual anti-corruption event on Dec. 11.
Ahead of the publication of the Global Corruption Report by...

Add new comment

Read our comment policy before posting your viewpoints

Enter the characters shown in the image.