Germany agreed to provide Iran with a 1.2 billion euro ($1.27 billion) credit line to help finance a rail project , according to an official at the Central Bank of Iran. The facility -- through state-run lender KfW IPEX -- will help fund the development of the Tehran to Mashhad railway, the official said, asking not to be identified. German banks have also agreed to help fund power stations in the country, he said. Iran has struggled to raise foreign financing for tens of billions of dollars worth of infrastructure projects it hoped it could get started after sanctions were eased 10 months ago. Large European banks have mostly kept their distance, worried that they could fall afoul of remaining U.S. sanctions, Iranian officials have said... The funding has been agreed in principle and is close to being finalized, Michael Tockuss, chairman of the Germany-Iran Chamber of Commerce, said in an interview in London, adding it would be the biggest credit line Iran has secured from foreign sources since the easing of sanctions in January. (Bloomberg News, "Germany's KfW Agrees on 1.2 Billion-Euro Iran Rail Loan," 11/28/2016).
Despite hopes of a new dawn for Iran's economy after nuclear-related sanctions were lifted, major Western banks are reluctant to do business with the Islamic republic for fear of US retribution. President Hassan Rouhani has said that to reach the target of eight-percent growth needed to modernise the industrial sector and relaunch the hobbled economy, Iran needs up to $50 billion in foreign investment every year. But without the big foreign banks, that looks impossible. "For the moment, the little European banks have agreed to work with us," said Parviz Aghili, head of the private Middle East Bank in Tehran. They include banks from Italy, Austria, Switzerland, Germany and Belgium, he said without naming them. "But not a single medium-sized or big bank has so far agreed to do it," he added... The limited number of institutions that do deal with the Islamic republic include Raiffeisen Bank and Erste Bank from Austria, Mediobanca and Banco Popolare of Italy, Germany's EIH, KfW and AKA banks, Belgium's KBC, ING of the Netherlands and Turkey's Halk, according to a banking expert in Tehran. "These banks have established working relations with the Iranian banks to open letters of credit for fairly small sums of 10, 20 or 50 million dollars." But they lack the resources to finance big projects like the deal struck between Iran and European aircraft manufacturer Airbus for 118 airplanes, or oil and gas development projects, the expert said. (AFP, "Iran banking hobbled by Western reluctance to engage," 9/13/2016).
Dr. Christian Staab, representing KfW-IPEX, plans to be a part of a German trade delegation travelling to Iran. (Iran Chamber of Commerce, Industry, Mines, and Agriculture Website, “Preliminary profile list of companies: German Economic Delegation to Iran”).
“The Iranian Bank of Industry and Mines and the German KfW Development Bank have agreed to cooperate extensively after the removal of the sanctions.” (Iran Business News, “German, Iranian Banks to Cooperate,” 11/29/2015).
KfW-IPEX Bank is “observing the situation [in Iran] very closely.” (Handelsblatt, “Banks Slow German Return to Iran,” 7/7/2015).