Iran to issue €1bn of bonds in December

Iran plans to issue bonds worth €1 billion with an interest rate of 9 per cent in December to help finance development of the South Pars natural gas field in the Gulf, a senior official was quoted on Friday as saying.

Iranian officials have previously announced plans to issue such bonds, but without giving a date.

"Based on the budget law, there will an issuance of €1bn in bonds in December for the development of South Pars phases," Fars News Agency quoted Morteza Elahi, head of planning at the state Pars Oil and Gas Company, as saying.

Iran has picked a state bank, Bank Mellat, as lead manager for the issue. Details of the maturities of the bonds were not immediately available.

The bonds for the development of the offshore South Pars field would be offered to Iranians living abroad as well as to foreign investors, Iranian media reported in July.

A senior oil official told Reuters in June that Iran was in talks with Asian banks on the planned bond issue, as part of its pursuit of energy sector funding.

In May, an Iranian state firm said Iran planned to issue $12.3bn of foreign currency and rial-denominated bonds over the next three years to help finance South Pars, the world's largest pure gas reservoir.

For years Iran has struggled to develop its huge reserves and like the rest of the world has had to contend with an international lack of credit, as well as problems specific to the Islamic Republic.

Iran has increasingly turned to Asia, whose energy demand is expected to outpace that in the developed world.

Western firms are wary of investing in the Islamic state for fear of US and UN sanctions. Washington is putting pressure on Iran over its nuclear programme, which Tehran says is for peaceful purposes but which the West suspects of being aimed at making arms.