Preliminary Approval Granted for Non-Governmental Oil Industry Guarantee Fund
With €300 million initial capital and 20 shareholders from banks, oil firms and state entities, the fund wins early approval at the 25th National Financing Council meeting
IRNA reports that preliminary approval has been granted to establish the Non-Governmental Oil Industry Guarantee Fund, with €300 million in initial capital and 20 shareholders from banks, oil firms and state entities, following the 25th meeting of Iran’s National Financing Council. The fund aims to provide guarantees and collateral to unlock upstream oil and gas financing for Iranian companies, with a diverse shareholder base and a structure designed under the legal framework of Article 6, Section A.
Tehran – IRNA reports that the preliminary approval for establishing the Non-Governmental Oil Industry Guarantee Fund was issued at the 25th meeting of the National Financing Council. The plan contemplates an initial capital of €300 million and the participation of 20 shareholders from five commercial banks, 10 Iranian exploration and production (E&P) companies, the National Development Fund, the National Iranian Oil Company (NIOC), Iran Energy Exchange, the Oil Industry Research and Technology Fund, and the Kish Free Zone Organization. The fund is intended to address a key bottleneck in financing upstream oil and gas projects by providing collateral and guarantees demanded by banks and financial institutions, enabling Iranian companies to secure financing for development plans.
Design work indicates that constraints faced by E&P firms and domestic contractors in securing guarantee collateral are major obstacles to mobilizing resources for development. In response, the Non-Governmental Oil Industry Guarantee Fund is designed with €300 million in capital, established under Article 6, Section A of the law on financing production and infrastructure, which enables legal entities to create guarantee funds. The primary objective is to facilitate the collateral and guarantees needed by Iranian companies and, in a second stage, support financing of upstream oil and gas schemes. A notable feature is its diverse and unprecedented shareholder mix: five commercial banks, ten Iranian E&P companies, the National Development Fund, NIOC, the Iran Energy Exchange, the Oil Industry Research and Technology Fund and the Kish Free Zone Organization will be the initial shareholders. Under the proposed structure, banks, E&P firms, the National Development Fund and NIOC would provide the majority of capital. The attendance of the NIOC CEO at the meeting underscores the strategic importance of developing new guarantee and financing infrastructure to advance oil and gas fields and strengthen Iranian companies in implementing upstream projects. Earlier, the fund’s founding assembly was held on 29 Bahman 1404, and with the approval and signing of related documents, the licensing, registration and start of operations were advanced.