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Press Releases

2000-53
March 16, 2001

Overseas Economic Cooperation Operation

JBIC EXTENDS BANK-TO-BANK CREDIT FACILITIES TO IRAN'S BANK MELLAT
--First Export Credit in Direct Facility Form to Iran in 25 Years--

  • 1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed today an agreement with Bank Mellat, the Islamic Republic of Iran's state-owned bank, for an export credit in the form of bank-to-bank credit facilities(1) totaling 46.9 billion yen for two export projects by Japanese firms for Iran. The facilities are cofinanced with the following commercial banks with JBIC assuming a 60 per cent share, or 28.1 billion yen. The projects receiving the export credits are the 4th Aromatics Plant Project and the PTA(Purified Terephthalic Acid) II Plant Project. The details are as follows.
    ProjectsFacility UserDescriptionExporter (Manufacturer)Total Amount (billion yen)Share of JBIC (billion yen)Cofinancing Banks
    4th Aromatics Plant ProjectBank MellatConstruction of the 4th Aromatics plant in Bandar AssaluyehToyo Engineering Corp.28.116.9The Fuji Bank, Ltd.
    The Sumitomo Bank, Ltd.
    The Sanwa Bank, Ltd.
    BNP Paribas
    PTAII Plant ProjectBank MellatConstruction of a PTA (Purified Terephthalic Acid) plant in Bandar Imam KhomeiniMitsubishi Heavy Industries, Ltd.,
    Tomen Corp.
    18.811.3The Sumitomo Bank, Ltd.
    The Bank of Tokyo-Mitsubishi, Ltd.
  • 2. The Iranian Revolution in 1979 and the subsequent Iran-Iraq War from 1980 to 1988 brought export deals to a standstill. In particular, Japanese export credit for Iran in the form of direct facilities has not been provided since 1976 when a buyer's credit was extended to the National Petrochemical Company (NPC) for exports related to the Iran-Japan Petrochemical Company (IJPC). However, changes in the political and diplomatic environment have occurred since the moderate reformer President Khatami took office in 1997. Business activities were reinvigorated, encouraging exports to Iran. These bank-to-bank credit facilities represent the first export credit in 25 years, and provide financial support for plant exports to Iran by Japanese firms. The two facilities are two of the four projects for which agreement was reached on basic terms and conditions during the state visit of President Khatami last November.
  • 3. Under the 4th Aromatics Plant Project, a plant will be built in Bandar Assaluyeh, Iran's southern coastal region facing the Persian Gulf. The aromatics plant will have the largest processing capacity in the world, annually producing 750 thousand tons of para-xylene, a raw material for synthetic fiber, and 430 thousand tons of benzene. Under the PTA II Plant Project, a PTA plant will be built in Bandar Imam Khomeini, a southwestern region also on the Persian Gulf, with an annual capacity of 350 thousand tons of PTA (Purified Terephthalic Acid), which is the raw material for plastic bottles and polyester fiber.
  • 4. These bank-to-bank credit facilities will provide financial support for the expansion of exports of equipment and facilities by Japanese firms, and at the same time will create closer trade relations between the two countries, while contributing to Iran's economic development through implementing its high priority projects.

1. Bank-to-Bank Credit Facility: A form of export financing in which a facility is extended to the importer by way of a financial institution in the country where the importer resides.(back)

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