Washington-based International Finance Corporation (IFC) announced on 19 December that it is to make its first investment in Iran for 28 years. The institution, the private sector arm of the World Bank, will loan $3 million and invest $2 million in the establishment of a joint-venture leasing company, Karafarin Leasing Company (KLC).
The IFC's investment in Iran, its first since 1974, will give the body a 20 per cent stake in KLC. The project's two sponsors, the local Karafarin Bankand Natexis Banque Populaires, will each take a 40 per cent stake in the new company. KLC is being established to counter the shortage of term finance to Iran's private sector and will provide small and medium-sized enterprises with an important source of funds (see Special Report).
The World Bank resumed lending to Tehran in May 2000, despite strong criticism from the US. Two loans totalling $232 million, each with a maturity of 17 years and a five-year grace period, were made for healthcare and sewerage projects (MEED 2:6:00).
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