IRENEX and FEZs to Boost Cooperation

EghtesadOnline: A memorandum of understanding was signed on Tuesday by heads of the Iran Energy Exchange (IRENEX) and the High Council of Free Trade and Special Economic Zones to boost cooperation.

News ID: ۷۸۶۵۷۴

30 June 2021

The MoU calls for facilitating financial services in the free zones and easing access to the capital market in such zones, according to Securities and Exchange News Agency.

On the sidelines of the ceremony, Hamidreza Momeni, secretary of the HCFTSEZ said the capital market could complement banks in funding ventures in the FEZs.

“The bourse is better placed than banks when it comes to lending. We are facing huge challenges in getting loans from banks,” he was quoted as saying.

Ali Naqavi, the IRENEX chief, said the exchange is willing to offer financial services to the FEZs to underpin projects and boost exports via the IRENEX.

As per the provisions of the agreement, IRENEX has agreed to fund energy projects in FEZs.

Bunkering and logistics in the FEZs are topics of interest and both sides pledged to contribute to this end.

Creating water markets in the zones was also discussed by the two sides. Setting up water markets has gained traction in Iran due to serious water shortages that have become a serious source of concern among the people, economic experts and water managers.

Water markets are venues in which buyers and sellers can trade water both through short- and long-term leases.

The MoU also calls for collaboration in funding power production and distribution projects as well as export through the FEZs.

In addition, the HCFTSEZ is committed to offer customs facilities to IRNEX to ease transit of crude oil, gas and other petroleum products via the zones. FEZ authorities can procure funds via IRENEX to set up warehouses.

Earlier in the month, Momeni announced plans to open an international bourse in Kish Island Free Trade Zone off the Persian Gulf to attract foreign investment.

Selling oil and byproducts via the energy bourse gained traction three years ago and soon after Donald Trump walked away from the Iran nuclear deal in May 2018 and vowed to drive Iran's oil exports to zero.

The Tehran government is doing all it can to counter the US economic blockade and export oil. One such measure was the diversification of oil sale methods and offering oil and oil products via the Tehran energy exchange.