Tehran, Beijing Sign Finance, Export MoUs

Tehran, Beijing Sign  Finance, Export MoUsTehran, Beijing Sign  Finance, Export MoUs

Tehran and Beijing signed a host of memoranda of understanding on financing power projects in Iran and undertaking export of electricity equipment.

The MoUs were signed in a meeting between officials from the Iran Power, Water Equipment and Services Export Company (Sunir) and China's state-owned Shandong Energy Group on Tuesday.

"Shandong has pledged to finance a host of new energy projects in Iran, while Iranian manufacturers will export power equipment through Shandong," Sunir Managing Director Bahman Salehi was quoted as saying by ISNA on Tuesday.

The official put the total value of agreements at $7 billion, adding that the preliminary agreements will have to wait for three months to be finalized when China's President Xi Jinping visits Tehran in a scheduled trip in January.

Under the new agreement, domestic manufactures will ship power equipment through the Chinese company to 15 African and other destinations, including Senegal, Ethiopia, Georgia, Armenia, Iraq, Pakistan and Afghanistan.

Iran will carry out exports under an engineering, procurement and construction contracting agreement, or EPC, with Shandong.

The Chinese officials said in a statement that Beijing is willing to expand trade ties with Tehran after the sanctions "even in the presence of European and American firms" in Iran's market.

It added that China is planning to reopen credit lines with Iran and will support "all Chinese companies willing to invest in or introduce new energy projects in Iran".

Shandong Energy Group, together with its subsidiaries, operates in the energy, equipment manufacturing and coal chemical industries.

It produces coal and electric power, coal machinery and medical equipment, and is also engaged in oil shale refining, as well as in logistics and mine production. The company is headquartered in Jinan, China.

  Fierce Competition

Salehi said China is a reliable partner and said Iran "will not forget China" in the post-sanctions era, as "they never turned their back on us" at the time of sanctions.

"However, the Chinese will find themselves in a competitive business environment", following the recent development in the political climate of the Islamic Republic, he said.

Iran and six world powers reached a historic deal on July 14 in Vienna that would limit the Persian Gulf country’s nuclear program in return for removing sanctions on its energy and financial industries.

The Chinese are trying not to fall behind their European rivals in securing their share from Iran's lucrative investment opportunities.

Tehran has hosted top trade delegations from Spain, the Netherlands, Austria, Spain and Germany in the past few weeks, preparing multibillion-dollar agreements in economic and energy sectors for the post-sanctions period.

Iran and China hope to bring the level of their trade exchanges to $60 billion from the current $52 billion in the previous year.

According to published reports, China's exports in 2014 amounted to $22 billion which enjoyed an 87% growth compared to the year before.

Meanwhile, China's import from Iran in 2014 rose nearly 10% and reached $25.5 billion from $23.1 billion in 2013.

Iran is currently China's third largest supplier of crude, providing Beijing with roughly 10% of its total annual crude consumption.