How much is Iran’s National Development Fund assets?

Head of the Iran's National Development Fund Mohammad Reza Farzin said the reserves of Fund have increased by $7.895 billion during first seven months (March 19 to Oct.21) and reached $42.862 billion.

According to the law, 23 per cent of petroleum exports, alongside some of the surplus oil export's revenues should be transferred to the National Development Fund (NDF).

NDF was established two years ago to transform oil and gas revenues into productive investments and private industry sector for future generations.

According to Farzin's statement, 20 per cent of Iran's oil, gas and condensate export revenues in last solar year and 23 per cent in the current year have transferred to the fund.

According to Iran's budget laws, the oil price for the last and current years have been considered respectively at $80 and $85 per barrel, while the real prices in the oil markets have been at $107.19 in 2011 and $110.5 during this year, then Iran has earned huge amount of surplus oil revenues during mentioned period.

Iran's petroleum export value was considered at $80 billion in last year's budget, while this figure actually reached $114.75 billion.

This means Iran has a $24 billion surplus oil export revenue while 20 per cent of the exported petroleum amounted to $29 billion in last solar year.

Despite last year, Iran's oil export for current year has been reportedly reduced by about 50 per cent (dropping one million bpd) from July, after new round of western sanctions on Iran's banking system and oil export began.

According to the current yearly budget, Iran's oil export volume was considered 2.2 mbpd, but Iran's oil export has fallen to one to 1.2 million barrels per day during the last six months.

In fact, Iran has experienced around a $2.4 billion deficit in oil revenue monthly based on the fixed oil price in budget law and a huge decrease in transferring 20 per cent of oil revenue to the NDF in the current solar year compared to last year.

On the other hand, during the past two years, about $15 billion dollars of fund's assets have been blocked by the reimbursing banks to issue Letters of Credit (LC) for the private sector. NDF has $31 billion worth of contracts with 14 banks. Then, the real cash reserves of NDF are very much lower than what has been announced.

The figures that have been announced by Iranian officials during past few months are different from Farzin's statement as well.

Mahmoud Dodangeh a member of the NDF governors' board said on Oct.2 that about $41 billion has been put into the fund, while with regard to $8 billion paid loans and issued financial facilities, today NDF's assets totals at $33 billion.

Vice chairman of NDF Ghasem Hosseini also said three month ago "there is likely no cash reserves in NFD".

On the other hand, according to current solar year's budget, the NFD should allocate $6 billion dollars to the private sector, while Farzin said that the total of transferred money to the fund during first seven months of the solar year was about $7.895 billion.

This amount mostly was transferred before imposed western sanctions on Iran in July. Regarding the huge decrease in Iran's current oil revenues, the NDF assets are unlikely increase anymore.


Dalga Khatinoglu /Trend/