News / Economy

China’s EXIM bank to fund Iran projects

Thursday, 10 March 2016 8:38 AM [ Last Update: Thursday, 10 March 2016 8:37 AM ]

China's EXIM bank has sealed a deal with Iran's Bank Tejarat to provide funds for Iran's petrochemical and telecommunication projects as well as those in other sectors.

Iran says the Export-Import Bank of China (EXIM) is set to provide funds for the development of the Iranian petrochemical and telecommunication projects.

The media in Tehran said on Thursday that this has been envisaged as per an agreement that China’s EXIM bank has signed with Iran’s Bank Tejarat to jointly fund Iranian projects.

Bank Tejarat has reportedly announced in a statement that the next segments that could benefit from the scheme are the automobile industry as well as the energy sector.

Providing financial guarantees for projects that are to be carried out by Iranian and Chinese companies or those from a third country has also been envisaged in the deal between the two banks.

Bank Tejarat has further emphasized that China’s EXIM bank is even set to provide insurance coverage for Iran’s import and export activities.

China’s EXIM bank in January signed a basic agreement with Iran’s Ministry of Road and Urban Development based on which it would fund the construction of a high-speed trains service between Iran’s capital Tehran and Mashhad in the northeastern province of Khorasan Razavi.

The agreement to provide a fund of around $4 billion was signed during a landmark visit to Iran by China’s President Xi Jinping.

China reportedly owes Iran over $20 billion in outstanding oil payments. The cash has been frozen in overseas banks after the US-led sanctions made it difficult for Beijing to transfer money to Tehran.

The two countries have reportedly reached a deal to settle some parts of the frozen money through China’s funding of Iranian petrochemical projects. It is not clear if the scheme that China’s EXIM bank has devised with Iran’s Bank Tejarat addresses is part of this deal.

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