Iran experienced hard economic situation during the last few years because of imposed sanctions however after JCPOA, the situation is changing little by little. Along with the problems emerged from sanctions, it is surprising for many countries to see Iran still being a dominant player in the Middle East. Iran represents great opportunities for foreign investment and other countries are anxious to trade with Iran, this matter will make Iran more financially secure and we can expect inflows of foreign investment to the country.
A while after JCPOA, Iran reconsidered foreign direct investment for halted projects, but all of efforts caused to only few projects with insignificant amount of investment which were mainly in automobile industry as joint venture agreements. When Hassan Rouhani won the election for the second time, new economic team tend to absorb foreign financing for projects instead of foreign direct investment. These efforts caused to the agreement between Iran (Bank Melli Iran and 11 other banks in Iran) and South Korea (Exim Bank) in order to invest in fields of healthcare, transportation and energy sectors.
The recent contract with China is in the field of management of water resources, energy, environment and transportation system that it worth around 10 billion Dollars which has been signed by Citic Trust that it is a Chinese investment management company and Export Development Bank of Iran, Bank of Industry and Mine, Refah Bank, Parsian Bank and Pasargad Bank in Iran. Citic Trust has reached the 51th rank in 500 investment companies around the world, it shows the promotion of financial rank of Iran in the world. Before this contract, the contract with South Korea was the biggest contract of Iran with another country, its value is 8 billion Euros and it was recorded as the biggest foreign loan of Iran until signing the recent contract with china. It seems that after JCPOA the connection with international has strengthen again and the credit rate of Iran has been improved.
The recent MoU (Memorandum of understanding) with the value of 15 billion Dollars has been signed between Central Bank of Iran and Development Bank of China in order to promote and development of construction and production projects. This would be the basis of long term commercial relation between Iran and China in the field of operation, engineering and education of manpower system.
Also, two agreements have been signed between Iran and two European banks recently. The deals with Oberbank, Austria’s seventh-biggest bank, for one billion Euros and Danske Bank, which is the largest bank in Denmark for 500 million Euros, are harbinger of confidence and reduction in risk of foreign investors.
Now, foreign finance of project has been done with value of more than 43 billion Dollars after JCPOA and more finance with value of more than 33 billion Dollars will be approved in near future. In addition, many contracts are waiting in line of negotiation with Iran and the most important of them are:
-Nippon Export and Investment Insurance and the Japanese Ministry of Finance with value of 10 billion Dollars,
-The Japan International Cooperation Agency with value of 1.34 billion Dollars,
-Italy’s Medibank and SACE, Italy’s state-owned export credit agency, export guarantee with value of 2.24 billion Dollars,
-Russian Ministry of Economic Development with value of 5.6 billion Dollars,
-Norwegian Guarantee Institute for Export Credits with value of 1.1 billion Dollars.
To wrap it up, after insignificant success to attract foreign direct investment with sustained efforts, government succeed to absorb remarkable amount of foreign finances for domestic projects. These agreements began with banks from China and South Korea and continued with Oberbank and Danske bank and there are some other agreements which are in the stage of negotiation. Through attracting foreign investment, the Iran`s economy can grow without any significant change in inflation rate and this is ideal for the government.