It appears that Iran is steadily fulfilling its ambitious goal to lure foreign funds despite the US President Donald Trump’s attempts to sabotage Tehran’s plans to benefit from its controversial nuclear deal with the world powers.
The Islamic Republic’s latest and probably the most significant achievement in this regard was a $6 billion investment agreement with Italy inked on Thursday.
Under the agreement between two Iranian institutions, Bank of Industry and Mine and Middle East Bank, as well as the investment arm of Italian state-owned holding Invitalia, the European country will put investments worth up to 5 billion euros ($6.02 billion) in the Islamic Republic.
By signing the deal, Italy has become the seventh country agreeing to finance projects in Iran since the Joint Comprehensive Plan of Action (JCPOA/ nuclear deal) was implemented in January 2016.
The nuclear pact was earlier struck in 2015 between Tehran and the six major powers to lift nuclear-related sanctions on the Islamic Republic in exchange for restrictions on its nuclear activities, paving the way for international business deals.
Iran’s sixth development plan (for years 2017-2021) has envisaged luring about $50 billion in foreign direct investment which could play a key role in rebuilding the country’s economy through developing the industrial sector and creating new job opportunities.
Previous financial agreements
Iran had earlier finalized similar agreements with India, China, South Korea, Denmark, Austria and Russia worth $40 billion for financing major development projects in the country.
Now with the latest deal, the number of European countries contributing to Iran’s economy in the post sanctions era has reached three.
China has been among the most important investors in the Islamic Republic over the past two years, as several Chinese institutions including Sinosure (export and credit insurance corporation) alongside with CITIC Trust and China Development Bank have agreed to put over $30 billion in the Iranian economy.
South Korea is another eastern partner that has agreed to put investments in the Middle Eastern country through an €8-billion credit line from Eximbank.
In addition to an "unlimited finance deal" with the Eximbank of Russia, the Russian government has decided to grant two state loans to Iran amounting to €2.2 billion to finance construction projects there.
India has also grabbed the chance to invest in Iran’s southern port of Chabahar as the two traditional partners inked a pact back in 2016, under which India agreed to equip and operate two berths in Chabahar Port Phase I with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.
Oberbank announced in September 2017 that it had signed a deal worth of one billion euros with Iran, enabling it to finance new ventures there and making it the first European bank to do so since sanctions were eased.
Following the Austrian Oberbank, Denmark's Danske Bank became the second European lender to ink such an agreement with Iran signing a €500-million finance contract with 10 Iranian banks last September.
The US has recently imposed new sanctions on 14 individuals and entities linked to Iran over their alleged roles in the rights abuses. Donald Trump, who has appeared as a serious critic of the nuclear deal, has announced his intention to extend sanctions relief over the JCPOA one last time.
Donald Trump, in the meantime, warned European allies and Congress that they had to work with him to fix ”terrible flaws” in the pact or face a US exit from the nuclear agreement signed between Iran and six world powers in 2015.
Although Donald Trump’s approach has disavowed the nuclear deal and raised the threat that sanctions could be re-imposed, the latest financial deal with Tehran, according to Governor of the Central Bank of Iran Valiollah Seif, demonstrates the trust of the international community in the long-term economic stability in the Islamic Republic.