Purchasing Iranian bonds profitable for Norway

Business Materials 19 February 2016 15:54 (UTC +04:00)

Baku, Azerbaijan, Feb. 19

By Emil Ilgar - Trend:

Norwegian pension fund's decision to resume Iranian bond purchases is reasonable, because it would be profitable, Mehrdad Emadi, consultant at the U.K.-based Betamatrix International Consultancy told Trend Feb.19.

Norway government authorized its pension fund, the world's largest sovereign wealth fund, to resume Iranian government bond purchases in the wake of the nuclear deal phased out sanctions against Tehran in January.

"Norway has a lot of experience in oil and gas projects and purchasing Iranian bonds in this sector, especially in petrochemical projects is profitable for Norwegian pension fund," Emadi.

The fund, which is worth nearly $814 billion and targets a 35-percent share of bonds in its portfolio, had been barred from buying into Iranian debt since January 2014 because of sanctions over Iran's nuclear program, Norwegian The Local daily news reported.

"Despite other western countries, Scandinavian nations including Norway don't have any political redlines with Iran and they have had a good relations with Tehran traditionally," Emadi said.

He added that in case Iranian government insures the bonds itself, foreign investors may fund Iranian petrochemical projects as much as two time more than oil and gas projects.

Iran says some $185 billion and $70 billion investment is needed for upstream oil and gas as well as petrochemical projects respectively.