Iranian petrochemical companies are more inclined to Europe and the United States than to China while trying to secure finance for projects. Chinese investors are reportedly charging high fees and commissions from Iranian manufacturers.
Deputy Petroleum Minister Abbas She’ri-Moqaddam said in August that he would prefer investments from Japan, Europe and the U.S. to those from China. Iran, restricted by sanctions, does not find it easy to use its oil money which China does not mind using to finance projects in the Islamic republic.
The petrochemical sector in the Middle Eastern country needs around $80 billion of investment over the next decade, Press TV reported. Restrictive terms by Chinese investors have prompted Iranian companies to seek investment elsewhere.
Marzieh Shah-Daei, director of projects at the National Petrochemical Company, said Tuesday that two petrochemical companies refused get funded from Chinese investors. Those entities prefer getting financed by European investors instead.
“These two cases involve the projects for which the allocation of the Chinese financing has not been finalized yet,” Shah-Daei told the IRNA news agency. “Project owners awaiting finance prefer not to get it from China because it is expensive due to high fees.”
According to Shah-Daei, Chinese investors demand that their clients should source up to 70 percent of equipment from China. She said Chinese investors made such demands whereas Iranian companies could get 79 percent of the required equipment from Iran itself.
Iran earlier secured an investment agreement with Japan. This will potentially boost Japanese investments in Iran after the sanctions are lifted in the early part of 2016, Reuters reported. Japan is reportedly eager to increase crude imports from Iran and invest in resource projects in the gulf nation.