Tehran to gain more German cover
Middle East Economic Digest
July 21, 2000
Germany plans to raise export credit cover to DM 1,000 million ($485
million) and may offer more help to German firms taking part in big projects.
Germany's improved terms for trade and project finance were announced on
10 July during President Khatami's visit there (see Seven Days).
A decision on insurance cover is likely to be made on 20 July at an
inter-ministerial meeting which will be attended by Hermes, a private agency
acting for the government in assigning export cover.
"The economy of Iran is growing and we want to dynamically expand
our economic relations. We will expand Hermes export credit guarantees
from 200 million marks to 1 billion marks," Chancellor Gerhard Schroeder
said on 10 July.
"There is no established policy," a Hermes source said on
11 July. "But I shouldn't expect a negative decision to be made on
Hermes has had limited cover for Iran, ranging from DM 50 million-200
million ($24 million-97 million), since the mid-1990s. Germany has traditionally
been Iran's main supplier, but its exports plunged to about $1,000 million
in 1999 - almost one-third the level achieved in the early 1990s.
The Hermes official says the agency has already upgraded Iran from category
6 to 5 on a scale of 1-7 used by EU members to set premiums on insurance.
German banks have recently become more active in raising finance for
projects in Iran. Deutsche Bank has syndicated a $530 million Euroloan
for the National Petrochemical Company (see Petrochemicals).