Seyed Mostafa Seyed Hashemi, deputy chair of the NDFI, said the fund
would distribute the money among at least 20 approved downstream petrochemical
projects, provided they are endorsed by the National Petrochemical Company.
“The development of any production sector hinges on capital, land,
technology, skilled labor, and training,” Hashemi said at a joint meeting with
NPC executives and industrial stakeholders. “We must work in coordination to
ensure balanced development, especially in the petrochemical sector.”
Ambitious Growth Plans Under Seventh Development Plan
Hashemi outlined a 40% expansion target for the petrochemical industry
under Iran’s Seventh Development Plan, aiming to boost annual output from 96
million tonnes to over 130 million tonnes.
“To achieve this leap, we need two essential components: feedstock
supply and financing. The fund is ready to support this goal,” he said, adding
that current sanctions and restrictions have sharply curtailed access to
foreign capital, necessitating the mobilization of domestic resources.
Consortium Model and Domestic Capital Emphasis
Highlighting the limitations of local banks in financing multi-hundred-million-dollar
projects individually, Hashemi urged the formation of consortia to spread risk
and pool resources.
“When small capital pools are consolidated, they can shape large-scale
projects,” he said. “Given the legal and capital constraints of many banks, a
consortium model is the most viable route forward.”
Hashemi emphasized that the NDFI remains the only institution in Iran
capable of supporting major development projects with substantial funding.
Since its inception, the fund has received about $178 billion in oil and gas
revenues, of which $100 billion has been directed to government projects,
around $18 billion to the National Iranian Oil Company, and the rest to private
sector ventures.
Private Sector Urged to Tap Into Fund Resources
“In recent months, the government has drawn down $4.5 billion from the
fund for strategic reserves and financial needs,” Hashemi said. “If these
resources aren’t absorbed by the private sector, they will remain in state
hands. It’s vital we redirect this capital into productive projects that
generate employment and economic growth.”
He called for more stringent project evaluations to ensure that
investments generate tangible returns. “The fund must support projects that not
only yield profits but also fuel production cycles.”
Financing Structure and New Tools
Hashemi clarified that under the fund’s charter, it cannot provide
direct loans to government bodies without express approval from the country’s
top leadership. All financing must be channeled through private entities and
non-governmental organizations.
He cited a successful recent example in which Bank Tejarat reviewed
and approved a financing request within two weeks, saying “Delays beyond this
timeline can derail entire projects.”
Projects with clear foreign exchange revenue models will be
prioritized, Hashemi said. “We must ensure that the hard currency we allocate
will be repaid. For example, a power plant project must demonstrate its ability
to generate export earnings.”
To bridge financing gaps, particularly for projects already partially
completed, the fund is also turning to Islamic finance instruments, including Murabaha
sukuk. One pilot effort in the steel sector sold $110 million out of a $120
million issuance, with the NDFI underwriting 90% of unsold bonds.
Short-Term Currency Loans and Phased Project Execution
Hashemi proposed the use of short-term foreign exchange facilities for
projects needing rapid support, and pointed to past models involving foreign
currency deposits with selected banks for quick disbursement.
He stressed the importance of phasing large projects, noting that a
glut in global markets—especially in China—has driven petrochemical prices down
to around $230 per tonne in some cases. “We must avoid overproduction that
exceeds market demand,” he warned.
Strategic Oversight and Development Priorities
Hashemi called for clearer coordination between ministries and
regulatory agencies to align investment with national priorities. “Without a
strategic roadmap, unplanned investment is a waste of valuable resources.”
He also underscored the importance of impartial project assessments,
warning against influence from personal relationships or non-professional
interventions. “Focus solely on the project, not the individual behind it.”
Material 55 Loans for Priority Sectors
In addition to foreign exchange allocations, the fund is distributing
less than 120 trillion rials (roughly $240 million) in domestic loans under
Article 55 for priority sectors such as agriculture, tourism, logistics, and
industry. These loans, issued through local banks, are capped at a 23% interest
rate and are aimed at reviving small businesses and idle production units.
“Some factories currently shut down can return to the production cycle
with these facilities,” Hashemi said.