IRAN - NPC Funding Background.

Expansions have resulted in NPC accumulating over $2.5 bn in debts. External sources of NPC funding have involved commercial banks and export credit agencies, with each group having backed one of the main contractors. But faced with the US sanctions, external funding has become very difficult to secure. The most prominent among foreign contractors have been companies from France, Germany, Japan and Italy. About $2.2 bn in credits were arranged by Societe Generale under a key financing deal finalised with NPC and the Central Bank (Bank Markazi) at the end of 1990. A major part of these credits went to the completion of Bandar Imam units, with French companies involved. The French bank had originally signed an agreement in September 1990 for a syndicated credit of $1.8 bn. An additional $400m credit was required to cover the cost of a petrochemical complex in Tabriz. Financing precedents so far are not encouraging. The Khorasan fertilisers complex was to come on stream in 1994 but was delayed by financing problems. Construction, begun in early 1993, was completed in mid-1996.