French banks warm to Iran - Financial Times, July 31
By VICTOR MALLET in Paris
Credit Agricole Indosuez (CAI), part of France's largest bank, yesterday became the latest French company to deepen its involvement in Iran as European investors continue to benefit from US antipathy to the Islamic government in Tehran.
CAI said it had signed a framework agreement with Iran's five largest state-owned banks to provide multi-source buyer credits - facilities for buyers of exports from various European countries - worth up to Dollars 1bn (Pounds 702m).
The previous CAI limit was Dollars 700m.
The agreement is guaranteed by the Iranian Ministry of the Economy and Finance and by European export credit agencies.
SG, the investment banking arm of Societe Generale, another French bank, announced a similar deal last week, also for Dollars 1bn, with Bank Mellat, Bank Melli, Bank Saderat, Bank Sepah and Bank Tejarat.
The French banks are helping to finance European exports of equipment, especially for the oil, gas and petrochemical industries, but also for industry and infrastructure development.
"The interest of European companies is rising," Michel Perrin, the CAI international finance executive responsible for Iran and Turkey, said yesterday.
"The financial situation of Iran today is exceptionally good. Oil receipts are rising and they are managing the economy better."
Among the Iranian contracts cited by CAI are those for Alstom, the French transport company that is selling 100 locomotives; Technip, the oil and petrochemical services group; and Nokia, the telecommunications equipment maker.
Last week, the US Congress overwhelmingly voted to extend legislation that provides for sanctions against non-US companies that make big petroleum industry investments in Iran or Libya, on the grounds that the two countries have supported international terrorism.
President George W. Bush is expected to sign it in spite of his administration's belief that such unilateral measures are ineffective and inflexible, and can damage the interests of US corporations.
US oil companies are barred from Iran and are watching with growing irritation as their international competitors pile into the market.
Under the Iran-Libya Sanctions Act, the US president is allowed to punish foreign companies that invest more than Dollars 20m in oil or gas development in either country. But no company has actually been penalised since it came into effect five years ago.
In 1998, the Clinton administration even granted a special waiver to a Dollars 2bn oil investment by a consortium that included Total of France, now TotalFinaElf, in order to avert a row with Europe.
Eni, the Italian energy group, is the latest European company to risk falling foul of the US law.
US officials say they have mentioned their concerns to Eni and the Italian government, but it is not clear if anything will be done.
As one French investor with interests in Iran said yesterday: "In the end, I think that the US authorities have turned a blind eye." |
