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).