Tehran, Beijing Strike $10 Billion Finance Deal
TEHRAN - China’s CITIC Trust will extend $10 billion credit line for supporting projects in Iran, based on an agreement signed between the company and five Iranian banks at CITIC Group headquarters in Beijing on Thursday.
Export Development Bank of Iran, Bank of Industry and Mine, Parsian Bank, Bank Pasargad Iran and Refah Bank are designated to act as the agent banks for using the Chinese finance on water management, energy, environment and transport projects in Iran, the official news portal of the Iranian government reported.
The Iranian delegation, headed by Valiollah Seif, the governor of the Central Bank of Iran, has traveled to China in an attempt to enhance bilateral banking relations.
The Iranian mission is scheduled to sign a memorandum of understanding with the Development Bank of China on financing construction and production projects worth €15 billion.
The mission is also set to hold a meeting with China Banking Regulatory Commission (CBRC).
Meanwhile Seif said Beijing has removed obstacles to financial transactions of Iranian traders in China, the governor of the Central Bank of Iran (CBI).
“The crisis at the moment has been resolved, but we expect the Chinese officials to provide Iranians with better conditions, so that they could resume their banking activities,” the official news website of the Iranian government quoted him as saying.
Urging for the expansion of banking ties between the two countries, he expressed his dissatisfaction with the current level of banking cooperation.
Seif added that banking ties have a key role in broadening economic ties between the two countries.
Speaking about a recent financial agreement between the two countries, he said the 2015 nuclear deal has paved the way for concluding financial agreements with Iran and currently several European countries as well as South Korea are interested in cementing such accords with the Islamic Republic.
Seif said that the initial plan was about concluding a $5 billion agreement but the sides later decided to increase the amount to $8 billion. However, the officials from Iran and China eventually agreed on $10 billion.
“This agreement can pave the ground for implementing mega large projects in the country,” the senior banker said.
Later Iran’s deputy economy minister said, within a 10-billion-dollar contract, China has allocated Lines of Credit (LOCs) to five Iranian banks.
Mohammad Khazaei said, “The deal marks the first major contract signed with China in the era after the Joint Comprehensive Plan of Action (JCPOA),” stated the official adding “upon signing this contract, we will be able to quickly finalize its executive procedures in Iran and China.”
Head of the Iranian Investment Organization added “Iran’s cooperation with CITIC Group is divided into three categories one of the main areas of cooperation with the large financial institution being financial analysis and project financing as signed by the parties.”