The government hopes to sell bonds worth about 750 trillion rials ($3 billion) in the 2021-2022 fiscal year.
As per the new budget bill sent to parliament on Wednesday, the government said it intends to offer bonds worth 230 trillion rials ($920m) "to fund spending, including for completing development projects".
The government is also allowed to issue bonds up to 100 trillion rials ($400m) to pay the principal and interest on matured bonds issued as per previous budgets, according to the draft budget published by the Plan and Budget Organization.
In addition, state-owned companies can issue a maximum of 65 trillion rials in bonds to implement projects "that are technically, economically, financially and environmentally viable". The companies in charge of issuing bonds have to guarantee the reimbursement.
Municipalities are allowed to issue a maximum of 80 trillion rials in bonds after approval from the Interior Ministry.
At least half of revenue from selling bonds must be used to improve and expand public transport and municipalities will have to guarantee the bond repayment.
Likewise, the Central Insurance company of Iran can issue bonds worth 10 trillion rials "to securitize insurance risks".
The industries, oil and energy ministries can jointly sell bonds up to 35 trillion rials with revenue to be invested in infrastructure. To fund projects for construction, completion and equipment of educational spaces, the government can further sell 20 trillion rials in bonds.
Additionally, it plans to issue treasury bills worth 200 trillion rials to pay its debts.
Oil Ministry Bonds
The government has allowed the Oil Ministry and its affiliated companies to issue bonds worth $3 billion in local and foreign currency. This is to repay the principal plus interest on matured bonds, maturing guarantees and bank loans in addition to paying contractors of oil and gas projects.
Vice President for Parliamentary Affairs Hosseinali Amiri submitted the budget bill to parliament on Wednesday.
In the next fiscal year (starting March 21, 2021), the operating budget (including revenue from taxation and exports) has been projected at 8,413 trillion rials ($33.65 billion at the market rate of 250,000 rials to one dollar).
Parliamentarians have 10 days (from Wednesday) to study the bill and send proposals to the special commissions.
Members of the special commissions will then have 15 days to submit proposals and amendments to the proposed budget.
