Economy, Domestic Economy
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Iranian Firms Interested in Nicaragua Canal Project

Foreign Minister Mohammed Javad Zarif attended a joint business forum in Managua on Tuesday.Foreign Minister Mohammed Javad Zarif attended a joint business forum in Managua on Tuesday.

Iranian companies  are interested in contributing to the construction of a massive canal across Nicaragua that a Chinese company is to build, Foreign Minister Mohammed Javad Zarif said Wednesday.

Representatives of private Iranian construction companies accompanying Zarif on a visit to Managua discussed the possibility of getting a share of the $50 billion project, the minister told a news conference.

The Nicaraguan Canal, formally the Nicaraguan Canal and Development Project (also referred to as the Nicaragua Grand Canal, or the Grand Interoceanic Canal) calls for a waterway linking the Pacific and Atlantic oceans that would rival the century-old one in Panama, which has recently been expanded to accommodate bigger ships.

Yet work on Nicaragua’s canal, meant to have started two years ago, has not begun. Hong Kong Nicaragua Canal Development Investment Company (HKND), the Chinese group tasked with the huge job, now says it should start at the end of this year, AFP reported.

In June 2013, Nicaragua’s National Assembly approved a bill to grant a 50-year concession to finance and manage the project to the private HKND Group headed by Wang Jing, a Chinese billionaire. The concession can be extended for another 50 years once the waterway is operational. Media reports have suggested the project would now be delayed or even possibly canceled because Wang Jing’s personal wealth declined greatly as a result of the 2015–16 Chinese stock market crash.

The Nicaraguan government has failed to present reliable information about whether or not the project can be financed, thus casting doubt over whether or not it can be completed. The HKND Group says that financing will come from debt and equity sales and a potential initial public offering.

Nicaragua’s government spokeswoman and First Lady, Rosario Murillo, said officials discussed investment opportunities with the Iranian delegation in the canal and other areas.

Meanwhile, a joint business forum was held in Managua on Tuesday, which was attended by Nicaraguan ministers, high-ranking government officials and representatives of different economic sectors of the Latin American country as well as Iranian officials and executives of the private sector.

“My government will guarantee investment and execution of private sector projects in Latin America,” Zarif said in an address to the forum.

In spite of good diplomatic ties between Iran and Nicaragua no trade exchanges have been recorded between the two countries in recent years.

Zarif made Nicaragua the second stop of a Latin American tour that began Monday in Cuba and is to to include Ecuador, Venezuela, Bolivia and Chile.

Financialtribune.com