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Russian Vnesheconombank Will Finance the Construction of Heat & Power Plant in Iran

Russian Vneshecomombank also known as VEB has entered into a contract with Bank of Industry and Mine, Iran (BIM), for financing the construction of a power plant in Hormozgan Province.

According to BIM’s site, the contract has also been signed by representatives of the Central Bank of Iran and Thermal Power Plant Holding Company (TPPH) on the 5th of September in Moscow.

TPPH is responsible for arranging the governmental activities in the sphere of thermal power production including planning, design works, management, and exploiting its subsidiaries according to the policy of Ministry of Energy.  

It is planned to carry out the Hormozgan Heat & Power Plant project by means of obtaining a loan facility from the Government of Russia in the amount of EUR 1.2 bln continuing for 5 years.   

Bank of Industry and Mine, Iran (BIM) is the agent bank of the project via which the loans will be transferred. Pursuant to the contract, BIM has laid the groundworks for further cooperation between Iran and Russia, especially as far as financing of Iranian projects is concerned.

BIM also was the agent bank to the amount of USD 1.5 bln for Exim Bank of China for the purpose of financing the electrification of 926-kilometer railways from Tehran to eastern Mashhad town located in Horasan-resavi province. A finance agreement was signed on July 26 and is considered to be the first such deal after the international sanctions imposed on Iran had been dropped.  

As is reported by Financial Tribune, in the course of negotiations between VEB and BIM the Russian bank expressed its interest in granting short- and long-term loans to Iran on the grounds of creditworthiness of BIM solely, without guarantee of the government or of Russian Agency for Export Credit and Investment Insurance (EXIAR).

VEB is a state-owned bank for development which is entrusted to grant funds for Russia’s projects abroad.  

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