Cassa Depositi e Prestiti, Italy's state financing agency, and Sace, Italy's export credit agency, have issued €4b of credit lines and associated export guarantees to Iranian public entities to engage in infrastructure projects. In addition, Sace is providing €800m in funding for Italian SME's doing business in Iran.
The move is one of the first in a series of foray's into the recently-opened economy, with companies from Boeing to Total engaging with Iran.
U.S. sanctions and the prevention of U.S. banks from dealing in dollar transactions with Iran remain major hurdles, which makes the €4b Italian deal even more significant.
The credit lines issued by the Italian government are “a game changer and a very, very important development for Iran, by which development projects will start moving,” said a senior European businessman. “It will open doors to a long line of medium-sized European banks and businesses who were worried about the consequences of doing business with Iran.” But while the credit lines could further encourage European and Asian Exim banks to finance Iran projects, it does not mean major international banks will re-establish relations with Iran in the near future. A senior western diplomat in Tehran predicted it would take Iranian nationals at least one more year to be able to open bank accounts with the world’s first-tier banks, while Iran’s government will have to wait around five years to use the world’s debt markets.