Suspension of Financing Contracts with Japan, South Korea, and Europe

An official from Iran's Investment Organization states that financing contracts with Europe, South Korea, and Japan have been suspended, with only commitments from China and Russia currently being executed. In an interview with Fars News Agency, Saeed Khani Ooshani, the Director General of Loans at Iran's Investment Organization, mentioned that although no European bank has officially announced a cessation of cooperation with Iran, these banks have currently halted their financial activities with Iran, and their continued operations are 'conditional on negotiations with the [European] Union.' He reported the suspension of financing contracts with European, South Korean, and Japanese banks, and although he noted that the financing contract with China 'remains in effect,' he added that both sides are examining how to cooperate in banking and find a way to continue banking transfers. The first round of U.S. sanctions against Iran, which were reinstated last week, targets the Iranian government's access to foreign financial facilities, thus putting the fate of financing contracts, which were concluded after the suspension of sanctions under the nuclear agreement with Iran, in a state of ambiguity. These sanctions will be completed with a second package starting from November 4, which prohibits financial transactions with the Central Bank of Iran and other Iranian financial institutions through foreign financial institutions, as well as the provision of insurance services and reinsurance for transactions with Iran, thereby further limiting Iran's ability to benefit from foreign investment. Regarding financing issues, the Director General of Loans at Iran's Investment Organization noted that due to sanctions, some banks 'do not engage in banking interactions with Iran at all,' while others are seeking solutions to continue cooperation that 'have not yet been operationalized.' He mentioned only two financing projects for establishing the Bandar Abbas thermal power plant and the Garmsar-Incheh Borun railway, which are financed by the Russians. According to Mr. Ooshani, 1.2 billion euros have been financed for the four-unit Bandar Abbas power plant, with advance payments made, and the Garmsar railway project has a financing of one billion euros, with its execution process having begun. Earlier in June of this year, the head of the Foreign Investment Organization reported that since the nuclear agreement was reached, over 32 billion dollars in financing contracts have been signed between the Iranian system and foreign suppliers. Reports previously published regarding South Korea and Japan's share in Iran's foreign financing mentioned the opening of a 13 billion dollar credit line by two Korean banks and Japan's 10 billion dollar financing in railway projects.