Economy, Domestic Economy

JICA Encourages Japanese Investments in Iran, Promotes Bilateral Ties - Interview

Business & Markets Desk
 Yukiharu Kobayashi
 Yukiharu Kobayashi

The Japanese government started Official Development Assistance (ODA) activity in Iran in 1957 and Japan International Cooperation Agency (JICA) affiliated to the government of Japan officially established a Tehran office in 1974. During the almost 60 years of Japan’s assistance for Iran, JICA has helped Iran implement many projects with government agencies and local officials, particularly in the field of environmental conservation.

“We are in charge of the implementation of overseas projects, the money for which comes from the ordinary Japanese taxpayers. The government allocates the budget to JICA and decisions on what projects to carry out are made by our Ministry of Foreign Affairs,” Chief Representative of JICA in Iran Yukiharu Kobayashi told the Financial Tribune in an interview.


“Recently, as you know, the economic sanctions were lifted after the Joint Comprehensive Plan of Action was signed. We (Japan) support this agreement. This means foreign organizations and entities including JICA can further expand their activities in Iran.”

International economic sanctions against Iran over its nuclear energy program began to roll back in January 2016 as part of the nuclear deal (JCPOA) the country signed with world powers a year earlier.

The official says JICA has three tools by which it implements Official Development Assistance Projects.

“One is yen loans which are very concessional loans in Japanese yen with a long-term repayment period. The most recent example of such projects in Iran is the hydropower plants in Masjed Soleyman Dam. The aim was to introduce a Japanese technology and know-how to generate efficient electricity.

The second tool is granted which are donated for projects in different countries. We haven’t offered grants to Iran so far. We are now in talks with the Ministry of Health to provide Japanese medical devices for diagnosing cardiovascular and other non-communicable diseases. Another grant project is concerned with air pollution where we will be providing some Japanese machinery and devices for inspecting and checking the exhaust gas from cars so that Tehran Municipality can analyze air pollution more accurately and take better measures to battle it.

The third tool is what we call 'technical cooperation' where we invite Iranian government officials to Japan to be trained and/or we invite Japanese experts to Iran to teach and transfer their knowledge. In these projects, we spend money in the form of providing air fares, accommodation fares, purchasing devices and machinery and covering any other related expenses. Again, Japanese taxpayers' money is utilized to implement the technical cooperation projects.”

Since the beginning of its activity in Iran up until now, the Japanese government and JICA have spent more than $998 million ($253.7 million on technical cooperation projects and $744.4 million on yen-loan or ODA loan projects) in the country.

Moreover, 3,509 Iranian participants have taken part in training programs in Japan and 1,205 Japanese experts have been assigned to projects in Iran to date.


Catalyst For Japanese Investment in Iran

“One important goal we pursue is that we hope by carrying out ODA projects in Iran we can encourage and support the inflow of [investments] of Japanese private sector to this country. If we can successfully implement ODA projects, by which equipment, machinery and knowhow from the Japanese private sector enters Iran, this can be a kind of catalyst that will encourage Japanese businesses to take part in other projects in the country.

We can serve as a threshold introducing Japanese companies to the Iranian market and later on these businesses can start investing in other projects in different fields.”

Japan and Iran signed a treaty to protect investments by Japanese companies across various sectors of the Iranian economy in February 2016. The treaty, which took effect on April 26, 2017, is seen as a tailwind for Japanese companies considering investments, including midstream petroleum businesses, in Iran, according to the Japanese Ministry of Economy, Trade and Industry. Possible Japanese investment in Iran could include petroleum, natural gas resource development, refinery and petrochemical projects. 

JICA's priority areas in Iran include: strengthening infrastructure, enhancement of job creation, disaster risk reduction, water resources management, building strong society, conservation of natural environment, environment pollution management, global warming management and strengthening relations with the international community and the surrounding area.

Projects at Hand

JICA has initiated two projects in Tehran to do with air pollution control.

“We are providing some Japanese experience. Tehran has almost the same population as Tokyo. Twenty years ago…we suffered from air pollution as well…but we were successful in improving the situation. We plan to do the same here.”

Since 1998, JICA has been in cooperation with Tehran Municipality and Tehran Disaster Management and Mitigation Organization for disaster risk reduction.

“Together we have made some evacuation maps for each area in Tehran, we also provided some techniques to supplement building materials and have held some training courses.”

Other projects currently being carried out by JICA in Iran include Anzali Wetland Ecological Management Project and Data Collection Survey on Hydrological Cycle of Lake Urmia. In these projects, Japanese experts have formed a so-called 'decision support system' to assist Iranian officials to make relevant sound decisions based on the figures and analysis provided by these experts who look into the lake’s conditions and its surrounding environment.

JICA Projects in Line With Development Plans

Vahid Kheirolomour, senior program officer with JICA Iran, says the agency tries to set the priorities in line with development plans of the country in which the projects are being implemented.

“In the Sixth Five-Year Development Plan (2017-22) of Iran, job creation, environment conservation and disaster management, for example, are all set as top priorities. So JICA tries to meet these expectations. After receiving requests from different ministries in Iran, we meet with our national focal points such as the Ministry of Foreign Affairs and the Plan and Budget Organization and of course the Embassy of Japan in Iran to decide which projects we can carry out.”

Kobayashi concluded that there are two reasons why JICA is doing what it is doing.

“First is the humanitarian perspective. We want to make this world a better place. Second, Japan is dependent on other countries, for example, we import oil from Iran and other products from other countries. So if the world is insecure or unstable Japan will also be affected. By assisting other countries we are also, of course, promoting bilateral relations between countries.

I don’t think Iran can be considered a developing country. We understand that Iran is a very important country in the region so that’s why the Japanese government is especially interested in expanding bilateral relations. This is why we are providing assistance to Iran.”


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