Iran will start offering bonds worth a total of 1 billion euros ($1.36 billion) from tomorrow (March 9) to help fund development of its energy sector, the Oil Ministry's website SHANA reported on Sunday. It would represent a rare bid by the Islamic Republic, which is under UN and US sanctions over its disputed nuclear work, to raise capital in this way.
Analysts say Iran needs funds to help modernise and expand its oil and gas sector, but particularly Western companies are increasingly wary of investing in the major oil producer due to the nuclear dispute.
The bonds, designed to help finance development of phases 15-18 of Iran's South Pars natural gas field, will have a maturity of three years and an interest rate of 8 percent, SHANA said, citing the head of state Bank Mellat, Ali Divandari. They will be offered both to domestic and foreign investors, SHANA reported, adding they would be available at Iranian banks abroad. Bank Mellat is handling the bond issue.
"These bonds will be available for sale starting March 9 for a period of 120 days ... it is predicted that they will be sold before the assigned sale date due to the attractiveness of the interest rate paid on them," Divandari said.
Economy Minister Shamseddin Hosseini last week said Iran planned to release 1.5 billion euros worth of bonds on March 6, including 1 billion euros for South Pars phases 15-18.