The Iranian government has been busy restoring trade and investment relationships since the lifting of nuclear-related sanctions on January 16, 2016. Here is a round-up of the latest economic agreements signed by the country:
Shipping: Oman and Switzerland come on board
Swiss-based shipping company MSC has signed an MoU with the Iran Ports and Maritime Organisation (IPMO) to increase port calls at Bandar Abbas, Chabahar and Bandar Imam. The agreement also involves MSC vessels, which returned to Iran in January after six years, carrying shipments to Iran from international ports, and effectively opens up Iranian investment opportunities to Swiss shipping firms. It was agreed during a three-day visit by Swiss President Johann Schneider-Ammann at the end of February.
Still in the shipping sector, Oman’s Port of Salalah has signed an MoU with Iran’s Shahid Rajaee and Chabahar Ports, to develop and promote an all-water route between the three ports, representing a roundtrip of 2,152 nautical miles. This will ultimately support increased trade and investment between the two countries.
Power: Far-reaching deal with Siemens, collaboration with Ukraine
On March 2, Siemens signed a number of agreements with the Iranian MAPNA Group in order to modernise the country’s energy infrastructure. The MoUs include a licence agreement under which MAPNA will acquire technological know-how to manufacture Siemens F-class gas turbines in Iran. According to Siemens, the parties will co-operate to deliver more than 20 gas turbines and associated generators over the next decade.
As a first project under the licence agreement, the companies signed a contract for the Bandar Abbas power plant, for which Siemens will deliver two F-class gas turbines and generators.
The two companies also signed an MoU to jointly develop the roadmap for the extension and optimisation of the overall Iranian power and electrification system, including power generation, transmission and distribution topics, but also providing solutions including EPC (engineering, procurement and construction) as well as financing options.
A Ukrainian delegation arrived in Tehran on Monday (March 7), and had reportedly signed a number of agreements with the Iranian government, including one aiming to resume bilateral energy co-operation. This will help increase the efficiency of Iranian power plants and high-voltage transmission lines.
The two countries are also said to have signed an MoU for the expansion of economic co-operation in the fields of agriculture, metals, mining and aviation.
Export finance: Germany and UK work towards reopening
Iran’s export credit agency (ECA), the Export Guarantee Fund of Iran (EGFI), and its counterpart, UK Export Finance (UKEF) signed an MoU on March 5 to enhance trade and economic co-operation between the two countries.
Under the MoU, the two ECAs will work together to identify opportunities for trade in capital goods, equipment and services. The agreement also allows the parties to co-finance and co-guarantee financing for projects or contracts in third countries involving British and Iranian exports.
Iranian media have also reported that Iran had agreed to clear its US$560mn of cover debt with Germany’s ECA, Hermes, by September, before Germany resumes providing guarantees for German exports to the country.
These latest agreements follow the ones signed at the end of January with France’s Coface and Italy’s Sace on outstanding payments owed by Iranian debtors due to the sanctions that largely blocked money transfers. They are expected to pave the way for the reopening of ECAs’ guarantee lines and a return to business as usual in Iran.