Narrative
Full Description
Project narrative
In February 2014, the Chinese Government provided an RMB 2.518 billion loan to Sabalan Petrochemical Industries Company — a partially state-owned Iranian company — for the Sabalan Methanol Unit Construction Project. The borrowing terms of the loan are unknown. However, it is known that the loan was backed by a Sinosure credit insurance policy. The loan that supported this project was likely drawn from the line of credit captured in Record ID#41429. The purpose of this project was to construct a methanol production plant with a capacity of 5000 metric tons per day located in the Pars Special Economic Energy Zone (PSEEZ) within the port city of Assaluyeh in Bushehr Province. Upon completion, it was envisaged that the plant would produce 1.65 million tons of methanol per year and create 350 direct and 1,200 indirect jobs. Petrochemical Industries Design and Engineering Company (PIDEC) — an Iranian state-owned enterprise — is the EPC contractor responsible for implementation. Construction began in June 2014 and the project had achieved a 51% completion rate as of February 2017. By December 2019, the project had achieved an 80% completion rate. The project was ultimately completed in April 2021.
Staff comments
1. The Persian project title is پتروشیمی سبلان. Sabalan Petrochemical Industries Company is a subsidiary of Sepehr Energy Corporation, which is partially owned by Bank Saderat (which is itself 30% owned by the Government of Iran). 2. The financier of this project is unknown. However, around the time that the project was financed, China reportedly owed Iran over $20 billion in oil payments. This funding was frozen in overseas banks after US-led sanctions made it difficult for Beijing to transfer money to Tehran. Iran and China reportedly reached a deal to settle some parts of the frozen money through China’s funding of Iranian petrochemical projects. Also, in 2017, a Vice President of China Eximbank reported that it had financed 26 electricity, petrochemical, oil and gas and nonferrous metal projects in Iran worth $9 billion. Therefore, China Eximbank is the most likely funder of this project.