Saturday, July 16, 2005

Iran,UK's 4th biggest market for credit guarantee

The British government's Export Credit Guarantee Department (ECGD) issued £99 mln ($182 m) financial support for UK companies doing business with Iran in the last fiscal year to March 2005.

The amount represented ECGD's fourth most active market, with Saudi Arabia continuing to dominate its business with guarantees totaling £759 mln, ahead of £150 mln supplied for projects in China and £149 mln for the US, IRNA reported. READ MORE

According to its latest annual report, the UK's official credit agency issued 113 guarantees and insurance policies to help British companies to compete in overseas markets during 2004-05.

The largest transactions underwritten in Iran were part of a $1.6 bln project to assist the downstream development of South Pars gas phases 9 and 10.

This involved supporting $54.5 mln worth of mechanical, piping and electrical equipment supplied by London-based Man engineers and $21 m worth of steel-related produced by the UK branch of Salzgitter Mannesmann.

ECGD said that oil, gas and petrochemicals business continues to be a major source of civil business for ECGD, with Iran [presently the major market for inquiries.

In recent years, the UK agency has started to support business to the National Iranian Oil Company and the National Petrochemical Company without a requirement of government guarantees or complex structured finance arrangements.

"Several smaller Iranian contracts were also completed this year and the flow of business is expected to continue with the increasing global demand for petrochemical products given Iran's large hydrocarbon reserves," its report said.

Other financing and insurance support included a project designed to improve the efficiency of electricity generation in the Iranian power sector.

This involved a £20 mln export contract to provide services and tooling to refurbish turbine generators blades undertaken by Doncasters, based in central England.

ECGD said the project included an element of technology transfer, which will enable the Iranian state power company in due course to undertake uture turbine upgrades itself.