Banking Relations between Iran and Turkey

Banking Relations between Iran and Turkey

On Sunday, top officials from the Central Bank of Iran and Turkey had a meeting in Tehran. Along with senior bankers, they had a high level talks to discover a new way of developing banking relations. One of the measures of the central banks of both countries is the currency swap agreement, which recently signed between Iran and Turkey.
This agreement is a very appropriate way to continue and increase cooperation. It is expected after the infrastructures are set in place, the implement procedure will be commenced as soon as possible. After rounds of negotiation, the officials of two countries’ central banks finally agreed on conducting bilateral trade in local currencies. Regarding to the agreement, both parties allocated a credit of 5 billion Lira and its equivalent in Rial to their agent banks. Bank Melli Iran and Ziraat Bank are the respective agent banks which such credit allocated to them. Both countries’ traders can use this credit as letters of credit with a repayment period of one year.
Based on this agreement, the payment tools such as letters of credit and remittances will be issue in the local currency. The traders will no longer need to use intermediate currencies. By such method the costs for both countries’ traders will reduce.
The future goal between two countries is connecting their bank cards. This movement allows their citizens to benefit from mutual electronic banking services and facilitate tourism.

Development of Strategic Relations

Referring to the longstanding history of trade between two countries, the expansion of the ties is very important. The implementation of the currency swap agreement is a step toward such aim. The CEO and other top-level executives of Ziraat Bank and Halkbank participated in the meeting. In addition to stating their opinion about the currency swap agreement, they expressed their willingness to improve the correspondent banking relations with their counterparts.
Finance Department

Solar Power Plants in Iran

Solar Power Plants in Iran

Renewable energies including solar energy would play an important role in future of power generation. In this regard a brief introduction on some of the legal elements of construction of solar power plants has been provided in this article. This essay does not reflect the full picture but only provides a glimpse.

A. Protective & Promotional Governmental Policy

Iran is situated in a highly suitable location for generation of power from solar energy. According to studies, 90% of the country has enough sun to generate solar power 300 days a year. To fully utilize this geographical position, the Iranian government has taken a very protective and promotional approach towards construction of solar power plants. In this regard, one of the key applicable instruments is National Instrument on Iran Energy Strategy adopted and approved by Energy Supreme Council which is headed by the Iranian president. In this instrument, paucity of renewable energy share in Iran power sector is recognized as a challenge of power sector. To overcome this challenge, it sets forward macro-objectives of power sector which includes:
• Diversification of energy resources;
• A shift from oil and gas as financial sources of budget to investment resources with emphasis on renewable resources.
To achieve such objectives, the following strategies have been designated:
• Commercialization of renewable energies’ technologies;
• Increase in share of renewable and clean energies in electricity production.

B. Feed-in Tariffs

To implement such strategies, the Renewable Energy and Energy Efficiency (SATBA) has been formed to manage and coordinates all the efforts. One of the key advantages is that the Ministry of Energy, acting through the SATBA, purchases all electricity generated from renewable sources belonging to the approved private sector projects at specific Feed-in Tariffs (FiTs). Under the current regulatory framework, developers will be granted a 20-year Power Purchase Agreement (PPA) negotiated on the basis of SATBA’s model- form. The level of FiTs available depends upon a number of factors, including project size (i.e. generating capacity) and technology-type. The Ministry of Energy determines and publishes revised FiTs (in Iranian Rial per kWh) each year. The Iranian government has endeavored to set the FiTs at a level that is designed to attract investors, both domestic and foreign and for this purpose the rate of purchased electricity from renewable sources is higher than the rate government pays to buy electricity produced by fossil fuel power generators. Current rates are as follows:
Above above 30 MW capacity *:3200 IRR per KWh
with the capacity of 30 MW and less: 4000 IRR per KWh
with the capacity of 10 MW and less:4900 IRR per KWh

* SATBA determines the maximum capacity for the large solar farms according to the total 2000 MW annual capacity development policy.

C. Practical Procedure

It is foreseen that an investor should apply for a construction permit and subsequently at the end of the process the PPA is concluded by either a newly-registered company in Iran or partnering with an existing Iranian company, subject to receiving respective permits in Iran. These extra permits include environmental permit, grid connection permit and land use permit (for state owned lands), PPA will also be signed with applicants. The detail of this summarized procedure is as follows:
• Applying for Construction Permit: At this stage, applicants should fill two worksheets and submit to Non-Governmental Partnerships Office of SATBA. This form shall be accompanied by relevant information pertaining to a developer’s technical and financial capability and general details of the proposed project, so that SATBA would be able to evaluate whether the application should proceed;

• Issuance of Grid Connection Permit: The application is forwarded to TAVANIR which is responsible for management of generation, transmission and distribution of electric power; this organization will then also analyze the applicant’s proposals and if satisfied with the proposals, approve the issuance of a Grid Connection Permit. The issuing body for plants of more than 7 MW will be the relevant regional electricity company;

• Environmental Permit and Land Right: The applicant will also need to obtain an Environmental Preservation Organization Permit from the Department of Environment. This will only be issued if such Department is satisfied that the project complies with certain environmental criteria. Where the land on which the plant is to be developed is state-owned (as is usually the case), the applicant must enter into a lease with the Land Affairs Organization of Iran;

• Concluding PPA: Once the applicant has received all the required permits, SATBA will invite it to start negotiating for a PPA. It is important to note that Construction Permits are not transferable so must be obtained in the name of the legal entity that is intended to own the plant.

D. Power Purchase Agreement Terms

Payment of the rates provided in section B is provided in the Power Purchase Agreement (PPA) of power plants for a 20-year period with the specified tariffs. This agreement starts from the signing date of the agreement which includes the progress and the construction period of power plant. It should be mentioned that a maximum delay of 9 months since the commercial operation date allows SATBA to terminate the PPA, cancel the construction permit and inform the authorities to return back the state lands which are intended for the construction of the power plant. If an agreement is terminated due to delay, the new request will be taken in to consideration after 2 years.
During the period of PPA and after that, the investor is allowed to sell electricity across the country in the form of bilateral contract, power exchange, electricity day-ahead market, or any other form approved by the Ministry of Energy. The export of electricity from clean and renewable power plants is allowed but depends upon separate permits. If such mechanisms are decided by the electricity producer, it replaces the guaranteed purchase of the electricity by the Iranian government.
Above-mentioned tariffs are multiplied based on the hourly coefficient which is announced and updated by Iran Grid Management Co. Moreover, to compensate for devaluation of money, the tariffs will be annually adjusted during the contracts based on Euro exchange rate fluctuations and internal inflation; It can be increased up to a maximum of 30% for power plants constructed, using local know-how, design and manufacturing.
The above-mentioned rates are valid for the PPAs which the power plants will be constructed and commercially operated within a maximum of 30 months for a maximum of 15 months for different types of solar power plants since the signing date of the PPA. In case of delay in finishing the project, a lower rate which is applicable to later agreement shall be applied to the previously- signed agreement. All tariffs will be multiplied by 0.7 starting from the first day of the second 10 years till the end of the contract.

E. Conclusion

The overall legal framework for construction of solar power plants in Iran is favorable for investors. There are many advantages to invest in this field but a secure position requires many legal and commercial considerations to be taken into account and this short introduction provides a glimpse and not the full picture. It is necessary to gather all relevant data and then to proceed to the project in accordance with legal advice.
Energy Department

Cooperation Agreement between Iran and India

Cooperation Agreement between Iran and India

Iran signed a 2b $ agreement for cooperation in the rail sector. In the presence of Iran’s Minister of Roads and Urban Development, Abbas Akhoundi, and his Indian counterpart Nitin Gadkari, this agreement was signed.
This agreement contains a memorandum of understanding worth $600 million for Iran. Through this MOU, Iran will be capable to purchase locomotives and freight cars from India. Furthermore, India announce its willingness to finance the purchases. This MOU was inked between the deputy for transportation planning and economics and managing director of RITES Ltd Co. RITES Ltd Co. is a government of India enterprise specialized in the field of transport infrastructure.

Project Procedure

As Iran’s Minister of Roads and Urban Development stated, both of the parties are willing to upgrade the MOU to the contract. Through this MOU Iran has this opportunity to be provided with the latest global advancements in rail industry. These new locomotives will help the transportation industry grow.
The important effect of this agreement is accelerating growth in Chabahar Port in line with India’s goal to connect to Central Asia. Ultimately Europe through this Iranian port can connect to the Asia. Iran’s only oceanic port city is Chabahar and consists of two separate ports: Shahid Kalantari and Shahid Beheshti.
The first phase of this project will commence on Dec. 3 2018 by Iran’s President Hassan Rouhani. The Capacity of Shahid Beheshti Port will be tripled to 8.5 million tons.
As the other part of this agreement, there is also the development of Chabahar-Zahedan Railroad which worth $1 billion. India has agreed to build a 500-km railroad from Chabahar to Zahedan. After connecting Chabahar to Zahedan, the railroad will be linked to Zaranj in Afghanistan.
Regarding to this Agreement, Iran is undertaken to provide land in Chabahar Special Economic Zone for Indian companies. It is a very appropriate area to establish petrochemical, fertilizer and other gas-based industries. Through the negotiation between the parties, it was announced that Chabahar-Zahedan Railroad will be completed by March 20th 2018.Finance Department

11th Tehran International Tourism Exhibition (T.I.T.E 2018)

11th Tehran International Tourism Exhibition (T.I.T.E 2018)

The Eleventh Tehran International Tourism Exhibition also known as T.I.T.E 2018 is scheduled to be held from Jan. 23 to 26 at Tehran’s International Fairground.

More than 470 Iranian and International companies from Italy, Germany, China, France ,Turkey and other countries will be participating in the event to show their latest products and services in the fields of airlines, sea lines and rail road lines, Hotels, Museums, Travel Agencies, Insurance Services, Rent a car companies, Travel and Tourism Academies, Hotel equipment, etc.
This exhibition will be staged in association with Iran International Exhibitions Company, Iran Trade Development Organization, and the Cultural Heritage, Handicrafts and Tourism Organization.

Iran, with its ancient history and rich cultural treasures, is among the top 20 countries with the highest number of tourism attractions. After conclusion of Joint Comprehensive Plan of Action (JCPOA)  and its  various opportunities for Iran’s economy, Iran’s tourism industry has been developed rapidly while entrance of billions of dollars of foreign investments in tourism and its relevant industries have made this sector as one the most attractive investment opportunities in Iran. Foreign Investment Promotion and Protection Act and government’s approach for controlling the risks of foreign investments ensures the foreign investors for enhance their business with the lowest risks. this Act is highly favorable to foreign investors and provides many advantages. Moreover, attendance of exhibition let the foreign companies to share their knowledge with local companies, in a mega show as a virtual encyclopedia for the entire industry,.Tour operators and handicrafts companies can also introduce themselves here on an international level and become familiar with innovations and new methods of tourism and other related industries.

Last year, the exhibition hosted countries from Turkey, Italy, Thailand, Malaysia, Cypress, China, Germany, Venezuela, France, and Armenia. Participants from Iran and abroad made this the sole credible event for the tourism sector of Iran.

Iranian and Italian Companies Signed the Contract for  Development of Petrochemicals

Iranian and Italian Companies Signed the Contract for Development of Petrochemicals


TEHRAN (FNA)- Iranian and Italian firms signed a contract to develop petrochemical projects in Iran.

The Ibn Sina Complex is due to use Tecnimont’s experiences in the field of utility offside engineering to develop its petrochemical plans with the capacity of producing 266,000 tons of different petrochemical products.

The Italian engineering company had also in 2016 signed a €1bn agreement with Persian Gulf Petrochemical Industries (PGPIC) to build refineries and petrochemical plants in Iran.

The contract also covers financing and the supply of parts and equipment as well as the construction of an acrylonitrile butadiene styrene (ABS) and rubber plant in the industrial city of Assalouyeh.

“Italy is seeking to open a new chapter in its cooperation with Iran, specially in the oil and petrochemical industries,” said Maire Tecnimont CEO Pierroberto Folgiero.


Iran’s Top Ski Resorts to be Presented for British Skiers

Iran’s Top Ski Resorts to be Presented for British Skiers

London, Oct 21, IRNA – The National British Daily Broadsheet Newspaper ‘The Daily Telegraph’ in a recent report said that Iran is the biggest untapped ski resort in the world.
A UK-based provider of ski courses around the world has announced a new trip to Iran’s top resorts for British skiers next March, run in conjunction with tour operator Mountain Heaven.’

‘Mountain Heaven MD Nick Williams visited the country in March 2016 and was impressed enough by the terrain, food, friendly people and atmospheric mountain cafés to launch holidays. The Snoworks trip combines four of Iran’s main ski resorts: Dizin, Shemshak, Darbandsar and Tochal.’

Iran’s ski areas reach altitudes that overshadow those of even the highest resorts in the Alps.

‘Snoworks is running its trip from March 10 – 18, 2018, costing £2,545 per person, based on two sharing a room.’

‘The price includes transfers, bed & breakfast accommodation provided by Ski Adventure Iran in partnership with Mountain Heaven, evening meals in ski resorts, visa approval service, guiding instruction from Snoworks and entrance fees for any sightseeing in Tehran.’