Mon, Sep 18, 2017 - Page 14 News List

China gives Iran US$10bn credit line


A woman walks past the China CITIC Bank logo at a branch in Hangzhou in China’s Zhejiang Province on Nov. 18, 2015.

Photo: Reuters

A Chinese state-owned investment firm has provided a US$10 billion credit line for Iranian banks, Iran’s central bank president said on Saturday.

The contract was signed in Beijing between CITIC (中國中信) investment group and a delegation of Iranian banks led by central bank president Valiollah Seif.

The Iran Daily said the funds would finance water, energy and transport projects.

Iran is vital to China’s trade ambitions as it develops its trillion-dollar “One Belt, One Road” strategy aimed at dramatically boosting its ties to Europe and Africa.

China is already Iran’s biggest oil customer and accounts for one-thirds of its overall trade.

Bilateral trade was just US$31 billion last year, but the figure jumped more than 30 percent in the first six months of this year.

In addition to the credit line, the Export-Import Bank of China (中國進出口銀行) committed to a further US$10 billion in loans, while the China Development Bank (中國國家開發銀行) signed preliminary deals with Iran for US$15 billion in infrastructure and production projects, Seif said.

The contracts reflect “a strong will for continuation of cooperation between the two countries,” Seif said.

In total, China has agreed to allocate US$35 billion in financing and loans for Iran’s economy, state news agency IRNA quoted Seif as saying.

The credit line will use euros and yuan to help bypass US sanctions that have continued, despite the nuclear deal between Iran and world powers in 2015.

Since the lifting of sanctions, Beijing has opened two credit lines worth US$4.2 billion to build high-speed railway lines linking Tehran with Mashhad and Isfahan, the Iran Daily reported.

The latest move follows an 8 billion euro (US$9.56 billion) credit deal signed with South Korea’s Exim bank last month.

European banks remain wary of penalties from Washington for working with Iran, but talks are said to be at an advanced stage for US$22 billion in credit deals with banks from Austria, Denmark and Germany.

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