Iran's deal­mak­ing with Europe: the seven big­gest con­tracts

The Pak Banker - - 6BUSINESS -

Aimed at ren­o­vat­ing its age­ing air fleet struck by years of sanc­tions, Iran Air has or­dered 118 com­mer­cial pas­sen­ger planes in­clud­ing 12 Air­bus A380s, the world's largest jet air­liner. Other mod­els on the list in­clude 21 A320ceo, 24 A320­neo and 27 A330ceo jets.

In to­tal, there are 73 wide-body and 45 sin­gle-aisle air­crafts. Iran has sig­nalled it needs as many as 500 new planes as other com­pa­nies such as Boe­ing also con­sider whether to do busi­ness with post- sanc­tions Iran.

"The deal with Air­bus is one of the largest for­eign con­tracts ever signed in the his­tory of the Is­lamic Re­pub­lic," Iran's min­is­ter for roads and ur­ban de­vel­op­ment, Ab­bas Akhondi, told the Guardian in an in­ter­view in Paris af­ter the deal was an­nounced: "We'd like to re­struc­ture Iran Air and bring it back to the mar­ket which can com­pete with other air­lines in the re­gion, cer­tainly we can do this within five to seven years."

Air­bus's chief ex­ec­u­tive, Fabrice Brégier, said the skies had "cleared for Iran's fly­ing pub­lic and Air­bus is proud to wel­come Iran's com­mer­cial avi­a­tion back into the in­ter­na­tional civil avi­a­tion com­mu­nity".

The Ital­ian metal in­dus­try firm this week signed a con­tract to sup­ply heavy ma­chin­ery and equip­ment to Iran.

The Ital­ian oil and gas con­trac­tor has agreed a deal to re­vamp and upgrade the Pars Shi­raz and Tabriz oil re­finer­ies.

The French car­maker made a deal for a joint ven­ture with the Ira­nian ve­hi­cle man­u­fac­turer Kho­dro to mod­ernise a car fac­tory near Tehran, where three new Peu­geot mod­els will be man­u­fac­tured. The two com­pa­nies worked to­gether be­fore sanc­tions and the pro­ject will pro­duce 100,000 ve­hi­cles a year start­ing in late 2017.

The oil gi­ant signed a con­tract with the na­tional Ira­nian oil com­pany to buy as many as 150,000-200,000 bar­rels of crude oil per day (€6.6m at cur­rent prices), ac­cord­ing to the French firm's chief ex­ec­u­tive, Pa­trick Pouyanné.

The French com­pany will as­sist in the con­struc­tion of a se­cond ter­mi­nal at Tehran's Imam Khome­ini in­ter­na­tional air­port. Akhondi said: "Imam Khome­ini air­port is lo­cated in the best place in the re­gion and with con­tracts that we have signed with Aéro­ports de Paris, we are build­ing a city air­port to make it a re­gional hub and to es­tab­lish Tehran [as an] in­ter­na­tional fi­nan­cial cen­tre."

The Ital­ian con­struc­tion firm will de­velop a new ter­mi­nal at Shahid Hashemi Ne­jad air­port in Mash­had, north­east Iran.

De­spite the deals and the de­sire of Euro­pean gov­ern­ments to be­gin trad­ing with Iran, fi­nanc­ing re­mains a big is­sue as ma­jor Euro­pean banks re­main re­luc­tant to han­dle Ira­nian pay­ments, de­terred by pre­vi­ous huge fines from the US trea­sury. Nu­clear-re­lated sanc­tions have been lifted but other US mea­sures re­lat­ing to ter­ror­ism and hu­man rights are still in place.

An­dreas Sch­weitzer, the se­nior man­ag­ing di­rec­tor at in­vest­ment firm Ar­jan Cap­i­tal, which is ac­tive in Iran, said banks, es­pe­cially those with a big US pres­ence, are un­likely to sup­port large trans­ac­tions "be­cause there is too much US un­cer­tainty about sec­ondary sanc­tions".

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