Iran dismisses China from financing two petrochemical projects

Business Materials 27 October 2015 12:09 (UTC +04:00)

Baku, Azerbaijan, Oct. 27

By Fatih Karimov - Trend: Iran has dismissed China from financing two of its petrochemical projects.

"China receives high commission rates for opening lines of credit. So, the two projects will be implemented using European finance,"Marzieh Shahedaee, director of projects at the National Petrochemical Company of Iran said, Iran's IRNA news agency reported Oct. 27.

The two projects were among the projects that had not been finalized to receive Chinese finance, she added.

Projects that are seeking foreign finance prefer not to receive Chinese finance because of its high commission rate, the official said.

At present, some petrochemical companies are receiving finance from Germany and Spain, she said, adding that foreign investors are waiting for lifting of sanctions against the country.

"Companies which use Chinese finance have to import 50-70 percent of their required equipment from China while we are able to provide 70 percent of our needed equipment from domestic suppliers," Shahedaee noted.

CEO of the National Iranian Petrochemical Company Abbas Sheri Moqaddam said on Oct. 14 that seven projects will come on stream in the current Iranian fiscal year, which ends in March 2016, and nine projects will come on stream in the next Iranian fiscal year.

Unfortunately, tens of petrochemical projects started in the past without securing finance resources, and were left unaccomplished, he added.

Based on a plan, methanol output is to be increased to 25 million tons over the next few years, he said.

"In negotiations with European and Asian investors, we emphasize that financing the projects is our first priority, because the country is in an appropriate condition in terms of technology."

Sheri Moqaddam said in April that some $30 billion of investment opportunities have been identified in Iran's petrochemical sector, which will be certainly welcomed by European and Asian investors after the sanctions against the country are lifted.

Edited by CN