Iran gets $5B credit line from Euler Hermes

Business Materials 26 December 2015 12:16 (UTC +04:00)

By Mehdi Sepahvand - Trend:

Iran and credit insurance company Euler Hermes have agreed on opening a credit line worth $5 billion which will be paid in two or three years, Iranian Deputy Minister of Economy Mohammad Khazaei said.

He added that during recent talks with Euler Hermes, Iran vowed to pay previous loan installments which have turned into outstanding debts as a result of sanctions, within one year or as soon as a problem with the lines is raised, Fars news agency reported December 26.

Khazaei further said that a Russian bank has also recently agreed to open a $2-billion line of credit for Iran.

This line of credit will be allocated to two projects in the ministries of transport and energy, Khazaei said.

Expecting the removal of the sanctions, Iran is eyeing foreign investment to rebuild various sectors. However, the Iranian government emphasizes investments that would bring technology and help improve the infrastructure, rather than fill the consumer goods market.

There is a power plant worth $1 billion to be launched in Fars Province, which a European insurance company has agreed to provide with a line of credit, according to the deputy minister of economy.

In another part of his interview, Khazei said that the UK Exchequer has agreed to settle a debt of $3 billion owed by the giant oil company Shell to Iran as soon as sanctions are lifted.

He noted that Iran's entire debts to international monetary institutes are less than the amount that Shell owes the country.

The sanctions are expected to be lifted within a period of one month as Iran and the group 5+1 (the US, UK, France, Russia, China, and Germany) start implementing their nuclear deal called the Joint Comprehensive Plan of Action (JCPOA).