Iran plans to issue bonds worth some 11.5 billion euros ($14.8 billion) by March 2011 to help finance development of its energy sector, the semi-official Mehr news agency quoted a senior official as saying on Friday. Iran needs funds to expand and modernise its all-important energy sector, but many foreign companies increasingly reluctant to invest in the major oil producer due to a long-running standoff with the West over its nuclear work.
In April, an official said Iran aimed to raise $12.5 billion this year by selling state firms, including two refineries. But analysts say some of them may simply end up being transferred within Iran's vast public sector.
Oil Minister Massoud Mirkazemi said in May that Iran needs around $25 billion a year in oil and gas industry investment and could turn into an importer of oil because of the lack of such funds. One of the world's biggest oil and gas producers, Iran has been hit by US and UN sanctions that have frightened away international energy firms.
European Union foreign ministers will adopt tighter sanctions against Iran next week, including measures to block oil and gas investment and curtail its refining and natural gas capability, EU diplomats told Reuters on Tuesday. Restrictions on investors transferring money out of Iran were removed this year and the limit on a foreign investor's stake in a company's shares was raised to 20 percent from 10 percent.
Iran has increasingly turned to Asian firms but they often lack the technology to implement oil and gas projects. Washington and its European allies fear Iran's nuclear programme is a cover to build bombs. Iran says it does not seek nuclear weapons and that China is looking to finance development of the Islamic state's refinery industry.
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