After the implementation of JCPOA in 2016, various European firms have signed business deals with Iranian firms for establishing or re-establishing business ties with Iran. However, there was a big obstacle for doing business in Iran and it was how to manage fund transfer?
On Thursday 21 September, after about one and a half years negotiation, Austria’s Oberbank re-established a credit line to Iran by signing € 1 billion deal with 14 Iranian banks to provide export loans for Iranian production and development projects.
The Austrian export credit agency Oesterreichische Kontrollbank (OeKB) is providing export credit guarantees under the agreement which was signed with: Parsian Bank, Saman Bank, Eqtesad Novin Bank, Bank Parargad, Karafarin Bank, Middle East Bank, Bank Melli Iran, Bank Mellat, Bank Sepah, Tejarat Bank, Bank of Industry and Mine, Export Development Bank of Iran, Refah Bank and Keshavarzi Bank.
On the same day, Denmark’s Danske Bank also has inked a € 500m credit line deal with 10 Iranian banks to finance construction and production projects of the private and public sectors in Iran.
Saman Bank, Bank Mellat, Tejarat Bank, Bank Melli Iran, Bank of Industry and Mine, Bank Sepah, Bank Pasargad Iran, EN Bank, Bank Keshavarzi and Parsian Bank are 10 Iranian banks engaged in the agreement with Denmark’s Danske Bank.
Oberbank, the 7th biggest bank in Austria, is the first European financial institution providing credit line for Iranian banks, while many large European banks still keep away from Iran’s banking system due to the US sanctions against Iran. So, these deals could have a symbolic significance and paving the way for other European banks to provide financing for export companies to participate in Iran’s projects.
According to the Oberbank’s general manager Helmut Edlbauer, the deal’s parties are expecting to support business worth about €1bn on several projects in the pipeline, healthcare, infrastructure and green power. He pointed that “We will support our long-term customers, where we know exactly who they are and what they are doing.”
He said that Austria’s finance minister, Mr. Schelling, had a fruitful meeting with Iran’s finance minister in Tehran on June to define the commitments expected from both countries in order to support business between Iran and Austria. “This meeting was important, and without it, this deal would be impossible.”, he pointed.
French state-owned bank BPI France has announced that they will also provide a €500m credit line to French companies for their investment projects in Iran within next year.
Officials in Iran are optimistic that other large European banks follow these moves in the near future for mutual benefit of all parties involved and for supporting Iran to re-establish business and banking relations with international markets.