Iran plans €1.5bn bonds to fund development

Iran plans to release €1.5 billion (Dh7.51bn) worth of bonds to finance the development of its key energy sector, including the giant South Pars gas field in the gulf, the Economy Minister said.

"The €1.5bn bonds will be issued on March 6. €1bn of the bonds will be allocated for financing the development of phases 15, 16, 17 and 18 of the South Pars gas field," Shamseddin Hosseini said yesterday. Hosseini said the bonds would be issued as part of Iran's national budget for the next Iranian year, starting on March 21.

"National Iranian Oil (NIOC) will guarantee the bonds, which will be issued by its affiliate, Pars Oil and Gas," he said.

Iran had earlier this week also said that the oil ministry would soon issue bonds worth $1bn (Dh3.67bn) to help finance the development of the various phases of the gas field, which contains about half of the estimated 28 trillion cubic metres of the country's gas reserves.

Iran has struggled for years to find the cash and the technology to develop its energy sector as sanctions and political pressure have kept foreign firms away. Western firms are increasingly wary of investing in Iran, the world's fifth-largest oil exporter, because of the nuclear row and political instability in the country. Iran has increasingly shifted to Asian countries to develop its oil and gas fields.

State-owned Asian firms are less susceptible to Western pressure to stay away from Iran market.

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