ECO Bank Signs Deal to Expand Iran Operations

The Central Bank of Iran has signed a cooperation agreement with ECO Trade and Development Bank in Turkey that could pave the way for the multilateral lender to grant finances to Iran.

The agreement was signed on Monday during CBI Governor Valiollah Seif's trip to Ankara. He was accompanied by Mohammad Ebrahim Taherian-Fard, Iran's ambassador to Turkey, and Hossein Yaqoubi, CBI's secretary-general for international affairs, who signed the deal with Burhanettin Aktas, ECO's Vice president.

"Based on the agreement, conditions and regulations of the activities of ECO bank's representative office in Iran will be devised," the official news website of CBI reported.

Previously, similar agreements had been reached between the lender and the government of Turkey that hosts the central office of the bank, and the government of Pakistan where the bank's representative office is located.

As the central bank notes, signing the landmark agreement became possible following a directive by the Cabinet, which decrees that the processes for implementing the agreement must be finalized in a maximum three years.

In early September, President Hassan Rouhani's Cabinet allowed CBI to engage in negotiations and sign the "agreement of the host country" required for the ECO Trade and Development Bank to open a representative office in Iran.

As outlined by the central bank, the agreement will become legally binding following the required processes and the parliament's approval.

The agreement prepares the ground for the ECO bank to expand its activities in Iran and grant loans and finances to development projects in Iran.

"The bank will be able to have an effective role in the expansion of trade between the member states of the ECO organization," CBI writes.

The Economic Cooperation Organization, or ECO, is a Eurasian political and economic intergovernmental organization founded in 1985 in Tehran by the leaders of Iran, Pakistan and Turkey. It provides a platform to discuss ways of improving development and promoting trade and investment opportunities.

Its development bank is a multilateral development bank akin to the World Bank, Asian Development Bank and the Islamic Development Bank, which was established in 2005 and aims to focus on "financing development projects at reasonable costs with favorable repayment conditions", as cited on its website.