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Sovereign Guarantee for €5 Billion Italian Finance

Jan 21, 2018, 9:51 AM
News ID: 22937

EghtesadOnline: In the latest meeting of President Hassan Rouhani’s Cabinet on Sunday, the Ministry of Economic Affairs and Finance was officially given the go-ahead to guarantee the recent foreign finance deal clinched with Italy.

The ministry is the official entity in charge of issuing the sovereign guarantee that seals any foreign finance deals, but requires the approval of the Cabinet to do so.

It was given the green light for “reinforcing foreign financial resources required within the framework of the regulations of the country’s development plans and annual budget laws”, IBENA reported.

Iran’s private Middle East Bank and state-owned Bank of Industry and Mine on Thursday signed the €5 billion deal with Invitalia Global Investment, the investment arm of the Italian state-owned holding, Invitalia, in Rome, according to Financial Tribune.

“The landmark deal marks the biggest finance from a European Union country in the form of a credit line for the Islamic Republic,” governor of the Central Bank of Iran, Valiollah Seif, said.   

The funds are to cover projects and partnerships in Iran jointly implemented by Iranian and Italian companies in the areas of mutual interest such as infrastructure and construction, oil and gas and power generation, as well as chemical, petrochemical and metallurgical industries.

Middle East Bank is to allocate the deal’s credit lines to the private sector while state-owned projects will be able to tap into the resources of the deal through the Bank of Industry and Mine.

The Cabinet also made several other decisions, including those pertaining to loans from Azerbaijan, air pollution and parliamentary schemes.

As per its ratificationt, the Economy Ministry was further authorized to issue permits for obtaining loans from Azerbaijan up to a maximum of €500 million for implementing the Rasht-Astara Railroad project.

The project is to conclude in three years, while the loans will have a grace period of six months and a maturity period of seven years.

Urban Issues

At Sunday’s meeting, the ministers also approved a series of guidelines aimed at preventing and battling Iran’s acute air pollution.

They include schemes concerning cars and heavy-duty vehicles plying on urban roads and law enforcement measures for imposing punishments on violating vehicles.

The Ministry of Industries, Mining and Trade was obliged to cooperate with the Ministry of Roads and Urban Development and the Plan and Budget Organization to renovate public transport vehicles of all metropolises as soon as possible by employing “the maximum capacity of local production units and tapping all financial instruments and investments”.

In conclusion, the Cabinet reviewed a number of schemes proposed by parliamentarians.