Since its establishment, Dana Energy has spent much energy building trust among Iranian lenders and commercial banks so that it has high credit scores now in the country.
The company currently has credit lines worth half a billion dollars in several banks, including Eghtesad Novin, Exports Development, Mellat, Tejarat, Pasargad and Sepah. As a private energy company, it has been a great success for Dana Energy to be able to open credit lines in key Iranian banks.
Back in 2008, when the company was young and its registered capital was too low to be accepted by many banks, we managed to provide more than $100 million bank guarantee for the Pars Oil and Gas Company proceeding to award a project worth 626 million euros to Dana Energy. In the past decade, we have built confidence and trust in the eyes of banks.
In the recent years, we have been able to receive more than 300 million dollar worth of bank guarantees from different banks. None was claimed. We are now planning to reach out regional and European banks. The company is hopeful that sanctions lifting could help open a new chapter in Iranian companies’ efforts to access cheap financing and guarantees.
Years of crippling sanctions against Iran had imposed high costs to companies based in Iran. Even now, that US financial sanctions are still in place, the companies must pay 3%-6% fee for transferring money, compared to the 0.7% normal transfer fee.
So the complete lifting of financial sanctions could not only cut the cost of opening LCs but also connect Iranian companies to regional and European banks. That would be a great achievement for Iran’s private sector.