The multisource buyer credit facility will be used to finance projects in all the local industrial sectors, including petrochemicals, infrastructure, transport and energy. Among major projects to be financed through the facility is the foreign component of the ethylene cracker at the olefins 9 plant of the National Petrochemical Company (MEED 28:12:01).

‘We had to add to the existing facility because it was completely used up. Since the signing of the framework agreement in 1997, the facility has been used for 20 transactions under the guarantee of five major export credit agencies [ECAs],’ says Jean-Paul Riolacci, BNP Paribas’ head of export finance for Europe, the Middle East and Africa. ‘The upgraded line will be used to accommodate all kinds of business and finance large complexes as well as smaller-scale projects.’

BNP Paribas was the first bank to provide medium-term loans to Iran, signing a framework agreement for $500 million with four state-owned banks, Bank Melli Iran, Bank Mellat, Bank Saderatand Bank Tejarat, in February 1997. Initially aimed at supporting the export of French goods and services to Iran, the facility was turned into a multisource buyer credit agreement in 1998, guaranteed by all the European ECAs, as well as South Korea’s Korea Export Insurance Corporation. The Economy & Finance Ministry has provided additional guarantees. The deal was negotiated under the umbrella of Bank Markazi (central bank).

‘The importance of the deal is that it shows that our facility has been very successful in the past,’ says Riolacci. ‘Many banks have signed credit lines in Iran, but some of them have not been tapped at all.’ The existing package has repayment terms of between three and 10 years.

The BNP Paribas facility is one of several French export credit lines signed with local commercial banks during the last 12 months. Both Credit Agricole Indosuez and Societe Generaleextended $1,000 million facilities in July. Credit Lyonnaissigned a Eur 500 million ($445 million) export finance line with local banks in September (MEED 28:9:01). All three are multisource buyer credit facilities.