The Isfahan Municipality and investors at the two-day 'Conference on Investment Opportunities in Isfahan' signed eight MoUs estimated at 24 trillion rials ($795 million), including one with Germany's Solibra System Montage GmbH for building a 1,000MW solar energy plant. One MoU was signed with China's Norinco Company for developing the tourist city's urban railroad.
Mehdi Jamali Nejad, mayor of Isfahan, noted that the conference was yet another indication of the city's determination to move forward. "This is a first step forward for Isfahan's development."
Both domestic and foreign investors will be the municipality's partners in development projects in Iran's top tourist destination, he added. Alireza Borhanipour, the event coordinator, said, "As the conference came to a close 59 investors expressed their willingness to invest in various projects across the province."
During the conference 12 specialized workshops were held with the focus on tourism, transportation, multifunctional complexes, and knowledge-based industries.
Stability Factor
Jamal Farajollah Hosseini, vice-president at Organization for Investment, Economic and Technical Assistance of Iran—affiliated to the Ministry of Economy -- said the Middles East and North Africa are expected to attract the highest foreign investments in 2017 and "Iran as the most stable country in the region is the best choice for global investors."
"However, signing agreements with foreigners needs legal permission," Husseini said. "Such permission eases the process of doing business and extends binding legal support for foreign investors."
The official said as the country opens up the economy to the outside world the "government will issue the necessary permits and licenses within 2-3 weeks."
Isfahan is attractive both for tourists and investors. The province accounts for 3% of the total foreign investment in Iran, 10% of which already have legal permits.
Referring to the 16% decline in the total foreign investments in the world in 2014, the official said, "In the case of Iran, sanctions on the banking sector contributed to the fall in foreign direct investment."
"Iran will use foreign investment to help reduce its dependency on oil," he said, adding that Tehran is doing all it can to pave the way for foreign investment in the post-sanctions era.
Market Attractions
Helga M. Kern, a Swiss investment analyst said on the sidelines of the conference that Iran's housing market and infrastructure like transportation are of interest to foreign companies. She pointed to Iran's 80-million population and human resources saying the country's markets too are attractive to foreign investors.
"Implementation of the nuclear accord with the six world powers could be a turning point for Iran,'' IRNA quoted her as saying.
An opportunity has arisen for Iran to expand ties with other countries including the European Union, develop its economy and become an important player in the region and the world."
The nuclear accord signed between Iran and P5+1 requires Iran to curb its nuclear activities in exchange for sanctions relief. The deal is expected to be implemented early next week following an official statement to be issued by Foreign Minister Mohammad Javad Zarif and the EU foreign policy chief Federica Mogherini in Vienna.
One of the major challenges Iran is grappling with is transferring money through banks. This is expected to be addressed soon after the lifting of sanctions according to the analyst. Kern added that some European investors are still hesitant to enter the Iranian market due to the stereotyping that the sanctions created. "It will take some time before this uncertainty and hesitation comes to an end."
During the decade-plus sanctions European firms cut ties with Iran due to the heavy fines set for companies doing business with Iran. Iran's access to international banking system was also severed by disconnecting Iranian lenders from the international transaction system SWIFT.
The Swiss investor urged foreign firms to visit Iran, saying that as she saw "investing and doing business in Iran is really safe." She alsto took stock of the tourism industry noting that it "may take a while for it to flourish" due to the bureaucracy and cumbersome regulations.
