World  Business and Economic Analysis 


  • Why (Some) Early Stage Investors look at Financial Models

    by Damien Lane

    This blog by Henry Ward probably got a spike in traffic yesterday when Fred Wilson linked to it.  It is a thoughtful and intelligent bit of writing, and lots of it made sense to me.  The bits that particularly resonated were:

    “Fundraising is a filtering exercise, not a popularity contest”.  As an entrepreneur, you are not going to convince an investor who doesn’t like you or your idea that they are wrong.  As a VC, I see one of my roles to be clear about whether I am interested or not.  The whole Episode 1 ethos is built around Being Frank, but as Henry writes, as an entrepreneur, you should be starting to develop some EQ and sussing out whether this is an investor you should be devoting your precious fund-raising hours to.

    “Ask for feedback other than the market isn’t big enough”.  Guilty as charged.  I confess to sometimes using that old chestnut to avoid being more critical.  But as an entrepreneur, in the spirit of customer development, once you have worked out that this is going to be a “no”, use the time to get some useful feedback and maybe some intros, or suggestions how to improve the deck, the idea.  Something.  Anything.

    But.  One thing he wrote did cause me to raise my overly large and greying eyebrows.  “Beware investors who ask for unit economics or a financial model.”


    OK, so I confess, I like to look at a financial model.  Not because I am a spreadsheet jockey, well, not JUST because I am a spreadsheet jockey.  Why else, other than a peverse affection for a Balance Sheet and working capital movements?

    Err…Because I like to know how long my cash is going to last and whether the amount being raised is enough to achieve something meaningful to appeal to Series A investors, but not so much that it forces too much dilution of the entrepreneur.

    I see lots of plans where the cash flows bear no resemblance to how funds will actually flow, where the assumption is that there will be no more hiring for 6 months after investment when the product plan is for loads of feature development or where entrepreneurs – particularly first timers – fail to differentiate between bookings / revenue and cashflow.

    Maybe the team is trying to raise more money than they need because of unrealistic hiring plans (We’re going to hire 25 people in the first 3 months even though we are a founding team of 2).  Why raise more than you need to and get diluted even more?

    And at some point, this thing I’m investing in does need to pay attention to profitability, right?  So I’m interested in how the entrepreneur thinks about her business from a financial perspective.

    You’re going to raise some money to grow your business.  Someone should be paying attention to cashflow – I want that someone to be the entrepreneur, and how am I meant to assess whether they are capable of doing that without looking at the plan?

  • ‘Tehran-Ankara trade could hit $100 billion’





     Regarding their present potentials, Iran and Turkey can enhance the volume of their bilateral trade up to $100 billion per annum, Mahmoud Va’ezi, the Iranian minister of communications and information technology said in Tehran on Saturday.

    “Both sides are resolved to reach a 30-billion-dollar trade volume in the near future, the goal which has been set by the two countries’ presidents in their recent meeting,” Va’ezi said in a meeting with Erdal Bahcivan, the chairman of Istanbul Chamber of Industry, IRNA reported.

    During the meeting, Va’ezi highlighted the measures taken by Iranian and Turkish banks on the ways to ease transactions and lamented that “Turkish banks are under the influence of westerners but we hope that they will take an independent attitude.”

    The Turkish official, for his part, emphasized on the key role that the private sector plays in hitting the determined trade volume and noted that the Turkish administration is in charge of removing banking barriers and lowering customs tariffs to set a proper environment for expansion of common trade ties.

    Elsewhere in his remarks, he addressed the issue of improving joint telecommunication relations and asked for establishment of a Turkish information technology park in Iran.

    On April 16, Turkish Prime Minister Ahmet Davutoglu in a meeting with the Iranian President Hassan Rouhani in Tehran, underlined his country’s decisiveness in expanding vigorous relations in various economic fields, specifically in banking, and noted that some measures have been done on the way to reinforce cooperation between the two sides’ stock exchange markets.

    The Turkish prime minister also underscored the vitality of converting the current preferential trade agreement (PTA) between the two countries into free trade agreement (FTA) in future.

    Earlier in the same month, Vaezi visited Davutoglu in Iran-Turkey Joint Economic Committee, where expressed Iran’s readiness to develop ties with Turkey in banking and tourism sectors.

    Davutoglu, for his part, said that his country is keen to invest in Iran’s different sectors, including tourism, emphasizing that the administrations of both countries should direct their private sectors toward the realization of shared economic aims.


  • Bosnia and Herzegovina , Golden Opportunities For Potential Investors




             World Business Year (WBY) talks to Gordan Milinić the Director of the Foreign Investment Promotion Agency of Bosnia and Herzegovina (FIPA) Sarajevo on Investment opportunities in country ,incentives for investment .


    Which areas of the economy do you see significant opportunities for investment?

    Promoting opportunities and potentials of Bosnia and Herzegovina (BiH) as a location for investing, we point out the first its favourable geographical location, availability of natural resources and beauties, a long tradition of industrial production, a large number of available industrial zones, attractive locations and manufacturing facilities, favourable legislation for foreign investors, currency pegged to the euro, the undersigned regional and bilateral trade agreements, and the prospect of joining the European Union.

    Bosnia and Herzegovina provides a wide variety of investment opportunities in different sectors. It is a favourable destination for all export-oriented production programs, considering the very favourable geo-economic position of our country, easy and fast access to large markets, contracts of the duty free trade or preferential status with almost all the major countries which allows duty-free export of all goods produces in BiH around the world. At the same time we have a very large offer of cheap production and office space, acceptable business costs, availability of labour at affordable prices, along with the existing incentives related to foreign investment and exports.

    Bosnia and Herzegovina has a great potential in the field of energy, both renewable (water, wind, solar, biomass) and thermal energy based on coal reserves and this area could really attract investments worth up to 10 billion EUR in the coming period.

    There is a significant industry of auto parts in the country and there is a large number of companies that manufacture various components for the automotive industry, such as braking systems, couplings, motors, spark plugs, etc., and they most of their products to the EU market.

    The agricultural sector of BiH offers huge opportunities for potential investors, based on the following major advantages: plenty of agriculture land - about 50% of agricultural land is uncultivated, favourable climatic conditions, availability of skilled and cheap labour and a long tradition in agriculture.

    The large natural resources and beauty of the country are slightly used, so that the field of development of tourism activity is at beginning of development. The most promising branches of the BiH tourism are: winter and mountain tourism, ecotourism, spa tourism, cultural and religious tourism and partly marine tourism.

    Among the attractive sectors for foreign investors, we would point out also the metal sector in Bosnia and Herzegovina, which has a long history, great potential, has a natural competitive advantage mainly because of existing resources of raw materials, labour, and similar.

    The wood sector is also important. The most famous natural resource of Bosnia and Herzegovina is a tree. 53% of the country is covered by forests used for wood processing and furniture production.

    Finally, we invite you to visit the FIPA Agency and to discover investment opportunities in Bosnia and Herzegovina! FIPA will help you to find suitable investment projects in Bosnia and Herzegovina and to realize it as soon as possible.


    What incentives do you offer for foreign investor in your area?

    According to the Law on the Policy of Foreign Direct Investments of B&H, many incentives are offered to foreign investors, such as: National treatment of foreign investors, i.e., foreign investors have the same rights and obligations as residents of B&H; Foreign investors are entitled to open accounts in any commercial bank in domestic and/or any freely convertible currency on the territory of B&H; Foreign investors are entitled to freely employ foreign nationals, subject to the labour and immigration laws in B&H; Foreign investors are protected against nationalization, expropriation, requisition or measures having similar effects;

    Equipment being imported as part of share capital is exempt from paying customs duties (with the exception of passenger cars, slot and gambling machines); The rights and benefits of foreign investors granted and obligations imposed by the Law (mentioned above) cannot be cancelled or modified by subsequent laws and regulations.

    Foreign investors may own real estate in B&H. Foreign investors enjoy the same property rights in respect to real estate as B&H legal entities.

    Foreign investors are entitled to transfer abroad, freely and without delay, in convertible currency, proceeds resulting from their investment in B&H.

    Free trade zones in B&H are part of the customs territory of B&H and have status of legal entity. According to the Law on Free Trade Zones of B&H, free trade zone founders may be one or more domestic and foreign legal entities or natural persons and establishment must be economically justified.

    The users of free zone do not pay VAT and import customs. Investment in the free zone, transfer of profit and transfer of investment are free of charge.  Incentives related to the taxes, customs, employment exist also.

    Foreign investors can insure their investment at the European Union Investment Guarantee Trust Fund for Bosnia and Herzegovina, administered by the Multilateral Investment Guarantee Agency (MIGA, member of the World Bank Group). Also, insurance is possible through insurance (international and domestic) companies existing in B&H.


    Iran's sanction has been lifted , What plans do you have for expansion of economic cooperation between Iran and Bosnia and Herzegovina?

    I  had a meeting with the Ambassador of the Islamic Republic of Iran to Bosnia and Herzegovina HE Seyed Hossein Rayabi dedicated to the possibility for economic cooperation between the two countries.

    The Ambassador Rayabi said on this occasion that after a long period of sanctions opportunities for economic cooperation with Bosnia and Herzegovina (BiH) are opening, particularly with the private sector, and that Iranian companies are interested in investing in energy, agriculture, mining, metal and tourism sector and auto industry.

    He also stressed the fact that there are great possibilities for cooperation in the field of tourism.

    Considering the expressed interest in investing in BiH, FIPA is in permanent contact with the Ambassador in order to provide all necessary information to all potential investors in Bosnia and Herzegovina.

    We hope in the near future to have opportunity to visit the Islamic Republic of Iran within a state business delegation in order to speak about possibilities for strengthening our cooperation.

    What is your outlook for 2016?

    Specifically, for 2016, the Agency has set itself a responsible and ambitious plan of activities on establishing a large number of contacts with potential foreign investors, foreign companies and business associations, foreign embassies and economic missions in Bosnia and Herzegovina, BiH Diplomatic and Consular Network, BiH Diaspora, etc. From the beginning of 2016 until today, we held more than 100 meetings with different actors of economic developments abroad and in BiH. We had a large number of meeting with Chinese investors, Japanese, Germans and Italians who are interested in the energy sector, wood industry and food production, with Austrians who want to invest in the leather industry, investors from Saudi Arabia who are interested in tourism, wood industry, agriculture, investors from the UAE and Qatar, which have expressed interest in tourism, Pakistani in the textile industry, Brazilians, Russians and British in agriculture and horticulture, Turks, Greeks and Slovenians are interested in energy, wood and food industries, etc.

    Some of the foreign investors that we met in the recent four months have already started investing. For example a company from Dubai is investing in tourism sector, a company from Serbia is investing in agriculture, several Chinese companies are investing in the road infrastructure and the energy sector, Austrian in the shoes industry, a Turkish company is investing in solar, wind energy and tourism, a German company will invest in metal sector, etc.

    In October we will have a big business delegation of investors from Japan which will visit Bosnia and Herzegovina in order to make familiarized with possibilities for investing in the country.

    Our objective is to reach the target amount of FDI in 2016 defined by the Direction for Economic Planning of Bosnia and Herzegovina.

    We are open for all kind of cooperation, so we invite all interested potential investors to contact Foreign Investment Promotion Agency of BiH (FIPA) to meet with us and to speak about possibilities for cooperation.



  • Ecuador to establish trade office in Tehran



    Ecuadorian Foreign Trade Minister Diego Aulestia announced that it will establish a trade office in Tehran in the coming days with the aim of introducing exports and expansion of markets in the Middle East region.

    He said that the advantages of setting up trade office in Iran will result in boosting exports, providing better living conditions for the people of Ecuador and improving the production cycle for creation of job opportunities.

    Aulestia said that the Iranian companies will attend the upcoming economic talks in Ecuador.

    Iran has been seeking to broaden ties and cooperation with Latin American states, including Venezuela, Bolivia, Brazil, Ecuador, Nicaragua, Cuba, Mexico and Colombia.

    Iran's strong and rapidly growing ties with Latin America have raised eyebrows in the US and its western allies since Tehran and Latin nations have forged an alliance against the imperialist and colonialist powers and are striving hard to reinvigorate their relations with the other independent countries which pursue a line of policy independent from the US.

  • European Union deepens economic cooperation with Iran


    A delegation of European Union officials visited Iran from 11-14 July to discuss deeper cooperation in the fields of economic policy, trade, investment and finance. The European Union is the largest integrated market in the world, comprising over 500 million people and represents a major opportunity for two-way economic and investment flows.

    The visit was led by Eric Mamer, Director at the European Commission Directorate General for Internal market, Industry, Entrepreneurship and SME's. Meetings were held with counterparts in the Iranian administration, including the Ministry of Industry, Mines and Trade; the Ministry of Economy and Finance; the Central Bank; the Customs Administration and the Iranian Chamber of Commerce. Members of the EU delegation also included officials from the Commission Services for Trade, Economy and Finance, Taxation and Customs, External Action Service and representatives from the European Central Bank and the European Investment Bank.

    As recently stated by the High Representative, Federica Mogherini, at the time of the high level visit to Tehran on 16 April, the European Union actively supports Iran's integration in the world economy and its membership in the World Trade Organization.

    During the current visit and as a follow up to the joint statement by the High Representative and Foreign Minister Zarif, it was agreed to initiate a broad based industrial dialogue to be launched on the occasion of a “European Economic Mission” to Teheran, planned for 17-19 October, to be led by EU Commissioner Elzbieta Bienkowska, together with representatives of European Business associations. This dialogue could cover a number of key sectors of mutual interest such as textile, automotive, raw materials, tourism and construction, but also horizontal issues like business environment and SME Development. In addition, a regular macro-economic dialogue is envisaged with the Ministry of Economy and Finance."

  • finance deal$1 bn close for Iranian Saipa company


    Deputy Commercial Manager of SAIPA auto making group Hassan Baghaei said on Saturday that the group has inked a one-billion-dollar finance deal with South Korean company SK networks.

     Baghaei said following preliminary talks between the two sides, the deal was inked on Friday.
    The South Korean company is to finance SAIPA's purchase of dlrs one billion worth of spare parts in complete knock-down (CKD), he said.
    Talks between the two companies on joint venture investment is now underway, he said.
    SAIPA has recently placed a dlrs. 250,000 order for purchase of auto-parts from South Korean company, he said.
    During the recent visit of the South Korean president to Iran, 19 memoranda of understanding (MoUs) on broadening of mutual economic cooperation were inked between the two countries.

  • Investment Licensing Procedure in Iran?Simple and Fast


    You are interested in to invest in Iran but interested to know  how long it take to get Investment Licensing ?


    Documents Required by the OIETAI( Organization for Investment, Economic and Technical Assistance of Iran)

    1. Application Form
    2. Establishment License / Primary agreement / Preliminary agreement of the pertinent Iranian organization
    3. Official letter of the foreign investor to submit to the OIETAl
    4. The foreign investors background including  a brief history  of the company ,the year of  establishment  area of activities in case  of foreign investor is a natural  person , a photocopy of passport  and resume will be provided.
    5. A list of machinery, equipments and CKD part which may be imported into the country as a part of the foreign investors capital (if available).
    6. In case that part of the foreign investor’s share is in the form of technical know –how, a draft of the contract outlining the conditions of the transfer of technology.
    7. Any further useful information.  is your final Project finance and FDI for Middle east and   Iran's Economy ,Q&A for investment in Iran
    If you have any questions,please send your question to: This email address is being protected from spambots. You need JavaScript enabled to view it.

  • Irish Firms to Invest in Iran’s ICT Sector


    Representatives from a number of Irish companies keen to invest in Iran’s information and communications technology (ICT) market will visit the country to pick Iranian firms for cooperation, an official said.

    According to Nasser Ali Sa’adat, the Irish delegation is going to visit Iran in May in the pursuit of investment opportunities in the ICT market.

    The Iranian official also noted that negotiations are underway with companies from the other countries, such as Bulgaria, Canada, France and Italy, in order to match foreign investors with appropriate domestic partners.

    There has been growing enthusiasm for trade with Iran after implementation of the Joint Comprehensive Plan of Action (JCPOA), a lasting nuclear deal between Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany).

    The deal came into force on January 16, terminating all nuclear-related sanctions on Iran.

    Back in December 2015, Sweden’s Minister for Enterprise and Innovation Mikael Damberg had also voiced the European country’s eagerness to boost investment in Iran’s ICT market.

  • Malaysia to Host Int’l Conference on Investment Opportunities in Iran


    The Malaysian capital of Kuala Lumpur is slated to host an international conference in late July to discuss investment opportunities in Iran after the removal of anti-Tehran sanctions.

    The International Conference on Investment Opportunities during Post-Sanction Era in Iran is planned to be held on July 27 and 28.

    University of Tehran’s Faculty of Entrepreneurship, University of Technology Malaysia (UTM), the Malaysian Ministry of Finance as well as entrepreneurs and investors from ASEAN (Association of Southeast Asian Nations) countries will jointly organize the international event.

    The conference is aimed at achieving several important objectives, including introduction of investment opportunities and economic projects in Iran to ASEAN member states.

    The international event will come against the backdrop of a new wave of interest in ties with Iran after Tehran and the Group 5+1 (Russia, China, the US, Britain, France and Germany) on July 14, 2015 reached a conclusion over the text of a comprehensive 159-page deal on Tehran's nuclear program and started implementing it on January 16.

    The comprehensive nuclear deal, known as Joint Comprehensive Plan of Action (JCPOA), terminated all nuclear-related sanctions imposed on Iran.

  • NIOC, Total to sign confidentiality agreement on oil project: Zanganeh

    The National Iranian Oil Company (NIOC) and France’s oil giant Total will ink a confidentiality agreement on development of Iran’s South Azadegan oilfield in the coming days, the Mehr news agency quoted Oil Minister Bijan Namdar Zanganeh as saying on Monday.

    The deal is coming after Total agreed to buy 160,000 barrels per day (bpd) of Iranian crude for delivery in Europe.

    South Azadegan is one of the five oilfields, dubbed the West Karoun oilfields, Iran shares with Iraq at the western part of Iran’s southwestern region of Karoun.  

    Iran discovered Azadegan oil field in 1999 in what was the country’s biggest oil find in decades. The country accordingly teamed up with Inpex to push the project toward development.  However, the Japanese company quit the project in what appeared to be a result of the U.S. sanctions against Iran, according to Press TV.

    NIOC later divided the project into South Azadegan and North Azadegan and both were awarded to China’s CNPC.  

    In 2014, Iran sidelined CNPC from South Azadegan due to its protracted delays in developing the field.

    South Azadegan is believed to hold an in-place oil reserve of about 33.2 billion barrels and its recoverable resources estimated at about 5.2 billion barrels.

    Development of joint oil and gas fields is a priority of the Iranian government.  

  • NIOC, Total to sign confidentiality agreement on oil project: Zanganeh



     The National Iranian Oil Company (NIOC) and France’s oil giant Total will ink a confidentiality agreement on development of Iran’s South Azadegan oilfield in the coming days, the Mehr news agency quoted Oil Minister Bijan Namdar Zanganeh as saying on Monday.

    The deal is coming after Total agreed to buy 160,000 barrels per day (bpd) of Iranian crude for delivery in Europe.

    South Azadegan is one of the five oilfields, dubbed the West Karoun oilfields, Iran shares with Iraq at the western part of Iran’s southwestern region of Karoun.  

    Iran discovered Azadegan oil field in 1999 in what was the country’s biggest oil find in decades. The country accordingly teamed up with Inpex to push the project toward development.  However, the Japanese company quit the project in what appeared to be a result of the U.S. sanctions against Iran, according to Press TV.

    NIOC later divided the project into South Azadegan and North Azadegan and both were awarded to China’s CNPC.  

    In 2014, Iran sidelined CNPC from South Azadegan due to its protracted delays in developing the field.

    South Azadegan is believed to hold an in-place oil reserve of about 33.2 billion barrels and its recoverable resources estimated at about 5.2 billion barrels.

    Development of joint oil and gas fields is a priority of the Iranian government.  

  • Oil, gas, petrochemical projects to be offered to int'l investors in weeks



    A senior Oil Ministry official said Iran is going to offer projects in gas, oil and petrochemical sectors to international investors in weeks.

    Oil Ministry Deputy for International and Commerce Affairs Amir Hossein Zamaninia told IRNA on Monday that in the next few weeks Iran will offer a number of projects to world companies in form of various contracts.

    He said the contracts will be offered in such frameworks as buybacks, IPC, engineering and procurement and construction and finance (EPCF).

    The official noted that foreign companies have many reasons for their interest in Iranian oil and gas projects and are looking forwards to receiving information on Iran’s projects for investment.

    He also predicted that oil prices will be balanced by 2017.

    Zamaninia said Iran enjoys a highly educated workforce which allures foreign companies, stressing that the country also has a solid political and security situation in the region.

    He also noted that many foreign companies have prior experiences of cooperating with Iran and are familiar with its situation.

    Referring to high interest of a number of Asian and European companies in joint investments with Iran on LNG projects, the oil ministry official went on to say that Iran has already had dialogue with many international companies active in the area.

    He said projects worth 20 billion dollars are ready for implementation in enhancing natural gas production in five years which are hopefully to be utilized in cooperation with foreign investors.

    Upon the implementation of the projects which upgrade Iran’s level of natural gas production to one billion cubic meters a day, the official said, the country will be able to join the world gas market in two or three years.

    Zamaninia stressed that neighboring countries and then Europe top the list of Iran’s priorities in gas supplying.

  • POSCO to construct $1.6b steel mill in Iran


    Iran and the Republic of Korea on Monday signed three agreements in the form of one memorandum of understanding (MOU) and two memorandums of agreement (MOA) during Iran-Korea Business Forum in Tehran.

    Worth about $1.6 billion, one of the MOAs was inked between Korean steel maker POSCO and Iranian steelmaker Pars Kohan Diar Parsian Steel (PKP), to jointly build a steel mill in Iran's Chabahar Free Trade-Industrial Zone.

    The steel mill will be built based on POSCO’s FINEX technology, touted to be more environmentally-friendly and cost-efficient compared to other steelmaking methods.

    Moreover, during the event, POSCO Energy, a POSCO's electricity-generating affiliate, signed a memorandum of understanding (MOU) with PKP to build a 500 megawatt power plant fed by excess gas generated by the envisioned steel mill, said the Korea Times.

    Also, in cooperation with Korea Electric Power Corp. (KEPCO), POSCO Energy will construct a desalination facility in the same area with a desalination capacity of 60,000 tons of seawater per day.

    Another MOA was inked between the Korean Doosan Heavy Industry and Construction and the Iranian Negin Mokran Development Company (NMDC).

    South Korean steel makers controlled more than half the Iranian market before the Western sanctions were imposed, according to POSCO’s research center, Reuters reported.

    Participating in the seminar were Joo Hyung Hwan, Korean minister of trade, industry and energy; Kim Seung-ho, the South Korean ambassador to Tehran; Mohsen Jalalpour, president of Iran Chamber of Commerce, Industries, Mines, and Agriculture; Valiollah Afkhami, head of Trade Promotion Organization of Iran; and Junggwan KIM, vice president of Korea International Trade Association.

    The forum was organized by Korea International Trade Association (KITA) and Korea Trade-Investment Promotion Agency (KOTRA), wherein 500 participants from 300 companies were present.

  • Regulations on Exports, Imports and Customs in Iran Free Trade-Industrial Zones


    Article 1

    In these Regulations, the following terms are used in lieu of the respective phrases:

    Zone: Each one of the Free Trade – Industrial Zones as established by Law
    The Law: The Law on Administration of Free Trade – Industrial Zones of the Islamic Republic of Iran, enacted in 1372, and other laws to be enacted in this respect in the future.
    Customs Territory: The state of the Islamic Republic of Iran, its territorial waters and air space where the customs and export and import laws of the country are fully enforced.
    High Council: The High Council of Free Trade–Industrial Zones of the Islamic Republic of Iran.
    Authority: The Organization of each Free Trade–Industrial Zone.
    Port and Airport Charges: The amount which an Authority collects from owners of goods and or air freight forwarders for the provision of port and airport facilities for the purpose of maritime and air transport and aircraft traffic.
    Service charges: The amounts which the Authority of each Zone collect for rendering warehousing, unloading transportation, loading, stacking, storage operations, extraordinary testing and tariff classification, issuance of the certificate of origin and other services rendered at the time of provisional exportation or importation, transit, transshipment and returning the goods abroad.
    Value Added: The difference between the price of the goods and the value of the material used in their production.
    Value: With respect to the goods imported to Free Zones, it is the CIF price of the goods.
    Regulation on Exports, Imports and Customs Affairs of the Free Zones: Regulations enforced within the framework of the Law on Administration of Free Zones by an Authority, upon approval by High Council.
    Authority Customs: A division of the organization of the Zone Authority: which is responsible for enforcement of Export – Import Regulation in each Zone.
    Customs Office Stationed in a Zone: A division of the organization of the Iranian Customs which is responsible for enforcement of the export–import regulation.

    Chapter Two: Authorized Customs Activities and Operations in a Zone and Regulations thereof

    A. Import of goods into Free Trade–Industrial Zones


    Article 2

    Import of any kind of goods to each of the Zones is permitted with the exception of the goods which are prohibited in accordance to Islamic laws or the laws of the country in which the Zones names are stipulated or are unauthorized in accordance with special regulations of a Zone.


    Import of goods originally produced in Israel is prohibited.

    Article 3

    The Authority is required to communicate with the Ministry of Commerce and Iranian Customs monthly statistics of all the goods imported into the Zone for keeping customs statistics and records.

    Article 4

    The procedure for the importation of goods into a Zone, entailing minimum formalities shall be drawn up by the Authority of a Zone, but in all cases observance of the rules and regulations pertaining to hygiene, security, culture and standards, in accordance with the prevailing norms in the Zone, shall be mandatory.


    Human hygiene standards shall be set by the Authority in coordination with the Ministry of Health, Treatment and Medical Education.

    Article 5

    Importation of goods into a Zone is authorized in the following manner and shall be overhand by these Regulations:

    1. Goods such as construction materials, tools and construction implements for building, manufacturing, commercial services, housing and infrastructure purposes (excluding decorative items and furniture) that enter a Zone from abroad or other parts of the country are, at the discretion of the Zone Authority and in quantities needed, exempt from payment of port and airport charges but are subject to service charges.

    2. Machinery, raw materials, components, and parts required for production, productive equipment and implements, spare parts for producing machinery for capital transportation vehicles (excluding passenger cars and leisure boats) are exempt from payment of port and import charges but are subject to service charges.


    3. Goods that enter a Zone from abroad or from other Free Zones (excluding goods specified in paragraph (1) and (2) of this Article and are conclusively cleared from customs shall be subject to the payment of port and airport charges, in the event that the said goods are re-exported, the port and airport charges shall be reimbursed.


    4. Entry of goods for safekeeping in bonded warehouses for a specified period is authorized. The transfer of such goods to the said warehouses is subject to internal transit formalities of the Zone concerned and the use and transport of goods from the said warehouse without the knowledge and authorization of procedures of the Authority shall be considered a violation of the Regulations.


    5. Excepting the cases where the Authority of a Zone may decide other arrangements, temporary importation of goods from abroad, other Free Zones of the country or from the customs territory, for display at fairs and exhibitions, re-export, re-packaging, separating, grading and sorting, clearing, mixing and similar purposes is within the authority of each Zone. The use or sale of such goods in the Zone which is imported from abroad, shall be subject to port and airport charges, based on the value of the goods at the value date of their entry into the Zones, and the customs formalities are finalized.



    The goods that enter a Zone from abroad or form other Free Zones or from other parts of the country for the purpose of finishing or repair are authorized imports of a temporary nature and in accordance with the rules of the Zone and upon payment of service charges but are exempt from port and airport charges the time limit for keeping such goods in a zone on a temporary basis shall be a maximum of two years.

    6. The entry and unloading of goods in Zone ports as designated by the Authority for the purpose of transshipment and external transit are permitted, subject to the payment of service charges and the completion of required formalities.

    7. All the goods transported from abroad destined for the Free Zones or from Free Zones destined for abroad passing through the mainland are subject to the regulations and procedures of foreign transit subject of Article (7) of the Regulations on Customs Affairs Law which shall be implemented with utmost simplicity and minimum formalities.


    External transit of legally prohibited goods requires the authorization of the High Council of Free Zones.


    B. Exportation and Exit of Goods from the Free Trade– Industrial Zones of the Islamic Republic of Iran


    Article 6

    Upon observance of respective Regulations, the Authority is authorized to issue certificates of origin for goods which leave the Zone. The respective official authorities within the Iranian territory are obliged to accept such certificate of origin.

    Article 7

    The exportation of goods from the Free Zones are subject to the guidelines determined by the Authority within the framework of these Regulations which shall be implemented with utmost simplicity and minimum formalities.


    The manifest of vehicles leaving a Zone for the destination of foreign countries, other Free Zones and or other parts of the Country is valid, upon confirmation by the Authority.

    Article 8

    The Authority is required to report to the Ministry of Commerce and Iranian Customs monthly statistical recordings.

    Article 9

    The exportation or exit of goods from a Zone is authorized in accordance with regulations and in the following manner:

    1.The exportation of goods manufactured in the Zone to foreign countries or other Free Zones of the country, regardless of whether the raw materials used in their production are originated from inside the country, foreign countries or other Free Trade Zones of the country, is authorized but requires submission of an export declaration for statistical records keeping.

    2. The importation of goods manufactured in the Zone into other parts of the country is exempt from customs duties and commercial benefit tax to the extent of their value added plus the value of the raw materials used therein, customs duties and commercial benefit tax shall be levied only on imported raw materials and parts used in such goods.

    3. The importation of foreign good (including consumer goods, raw materials, machinery and other goods) which are shipped intact from a Zone to other parts of the country is permitted, but their clearance from customs is subject to observance of the general Export – Import Regulations and customs regulations of the country.

    4. The exportation of domestic goods, if intact, from a Zone to foreign countries is subject to compliance with the general Export – Import Regulations of the country.

    5. The temporary entry of goods to a Zone from other parts of the country for the purpose of repairs or finishing which are returned to the country after finishing or repairs, is authorized and is subject to the procedures set forth in the Customs Law, They are exempt from customs duties and commercial benefit tax with respect to the amount of the wages paid for such repairs and finishing, but replaced or added parts and components and prices of foreign origin shall be subject to customs duties and commercial benefit tax on the basis of the general Export–Import Regulations of the country;

    6. Returning back of the very goods imported to the Zone from abroad ,or returning back of the goods imported from other parts of the country into the Zone is permissible in accordnce with the permit of the ZoneAuthority.

    7. The temporary exit of goods from a Zone to a foreign destination or other parts of the country (excluding the goods that have entered into a Zone from other parts of the country) is permitted upon obtaining prior authorization from the Authority, such goods are exempt from port and airport charges when returned to the Zone.

    Article 10

    The exportation or exit of goods from the premises of a Zone in any one of the manners mentioned in paragraphs of Article (9) is subject to the payment of service charges to a Zone, if services and facilities of the respective Zone are utilized.

    C. Regulations on Goods Accompanying Passengers

    Article 11

    Travelers, whether Iranian or foreigners, who directly enter a Zone through authorized airports or ports are allowed to bring along into a Zone goods (excluding the goods prohibited by religion or law) to the extent that they are not of commercial nature and clear them without payment of airport changes.


    Natural or legal persons intending to reside in a Zone for more than one year and whose residence is approved by the Authority are allowed to import into a Zone only once their household appliances and office equipment in reasonable quantities without payment of port and airport charges.

    Article 12

    Travelers who depart directly to a foreign destination from a Zone are allowed to take along all goods (excluding the goods prohibited by religion or law) without obtaining authorization, provided that the goods are not a of commercial nature.


    Exit of antiques, handwritten books, original cultural objects and various coins is not permitted.

    Article 13

    Goods accompanying travelers who intend to leave a Zone for other parts of the country shall be subject to the general Export- Import Regulations of the country.

    D. Regulations on Violations

    Article 14

    The Authority is required to refrain from clearance from customs the goods whose importation is prohibited or can not be cleared from customs in accordance with the Zone‘s regulations, excluding the religiously or legally prohibited goods, in which the names of the Free Zones are stipulated if such goods are declared with full name and complete particulars and specifications for the purpose of final importation, and the free Zones must notify in writing the owner of the goods or his representative that he must send the goods out of the Zone within a maximum period of time determined by the Authority. Goods prohibited by religion or law shall, in which the names of the Free Zones are stipulated, be governed by relevant regulations.

    E. Miscellaneous Regulations

    Article 15

    Wherever it turns out after customs clearance of goods, that the funds whose collection a duty of the Authority were received in excess of or less than the required amount, the Authority and the owner of the goods can claim and receive, as the case may be, the respective differential within four months from the date of signing the clearance document of the goods concerned.

    Article 16

    Air and maritime freight forwarding agencies and owners or users of transport vehicles are required to submit, at the time of the entry of the transport vehicles into the authorized airport, port and or land terminals, to the Authority one photocopy or copy of the bill of lading relating to each item of the goods attached to the list of the whole cargo.

    Article 17

    Control of and supervision over the importation and exportation of goods from the Free Zone to other parts of the country shall be the function of Customs Office of the Islamic Republic of Iran. The head of customs office stationed in a Zone shall be appointed by the Director of the Customs Office, upon the proposal by the Authority.


    The control of and supervision over the importation and exportation of goods from the Free Zone to other countries shall be the function of the Authority Customs Office, in accordance with these regulations and the relevant legal guidelines.

  • Strong FDI flows need stability

    Current investment driven by hope of future change
    by: Devangshu Datta 

    International capital flows are driven by various considerations. Investors enter specific businesses but some factors affect every business in a given country. Relative growth rates and relative inflation rates are only the most obvious of the macro variables cross-border investors consider. Ease of currency conversion and size of local markets are also important. Investors judge the capacity of institutions and regulators, and the transparency of legal and tax systems. They also assess political stability.

    Few countries score high on all parameters. Different types of investors also have different needs. Some investors are short-term, some long-term. Some are portfolio investors looking at listed companies. Depending on type, their focus will lie in different areas.

    A short-term portfolio investor will focus on capital gains rates and mechanisms. Capital controls determining the ease of entry and exit will also be important. Such an investor will demand evolved financial markets and track volatility.

    A long-term portfolio investor will not be concerned about volatility but want an independent central bank and independent regulators. A direct investor who is bringing in foreign direct investment (FDI) to set up a business will be concerned about political stability, fair contract laws, independent judiciary and acceptable dispute-resolution mechanisms.

    It might seem counter-intuitive but a direct investor may not care much about democracy, or desire a transparent, honest legal system. In practice, a corrupt but stable dictatorship, may be easier to deal with. Dictatorships have continuity. People who are bribed will stay in power indefinitely. A crony capitalist can get favours from a corrupt regime.

    Complications arise in democratic regimes like India. On many parameters, India receives good scores. It has large domestic markets. It has sophisticated capital markets. It has a reasonably open capital regime since money can enter and exit quickly. It has good growth and independent regulators. On paper, India has an excellent legal system, though it is very, very slow in practice. However, there are downsides. India's complex laws and red tape make it hard to launch a start-up and it also is a very slow process. Capital is expensive. Infrastructure is poor. The tax regime is complex with lots of discretionary powers to officers. The federal nature of government with the division of power between states and the Centre makes it hard for businesses to go pan-India.

    India also has plenty of corruption and that is a "revolving chair" because of change in regimes. Hence, different people may need to be bribed every so often. There can also be peculiar and unexpected hurdles such as retrospective taxation. In many Asian nations, capital comes from overseas investors with strong ties to the concerned nation. China, for example, receives a lot of FDI from overseas investors of Chinese origin, who are comfortable with the peculiarities of investing in China. India has a large, successful diaspora but many NRIs are professionals rather than businessmen. Hence, the FDI contribution of non-resident Indians (NRIs) to India is not as high as the FDI contribution of overseas Chinese to China.

    Portfolio investors have tended to be fairly comfortable with India because of a good capital gains tax regime and many double-taxation treaties. There is some anxiety over the imposition of a new tax regime with the General Anti-Avoidance Rule (GAAR) from April 2017. Also poor earnings growth for the past two financial years and projections of low earnings growth for 2016-17 has made portfolio investors unenthusiastic.

    However, FDI inflows increased in 2015-16, even as foreign institutional investor (FII) contributions dipped. NRI remittances also dipped because Indians in the Gulf are feeling the pinch. FDI investments are supposedly driven by more "permanent" factors because FDI is committed for the long term. If permanent factors are changing for the better, FIIs will return. Indeed, March saw strong portfolio inflows, though FIIs were net sellers through the financial year. However, some of the current FDI investments are being driven by hope of future change, rather than current changes. Investments could easily bog down unless there is delivery on the taxation and legislation front.

    Another consideration is political stability and continuity. A series of state elections is due through the next 12-18 months. If there is a lot of violence in those election campaigns and/or the Bharatiya Janata Party loses ground in them, there could be a negative re-rating of India as an FDI destination.

  • 23 countries attending 3rd Iranian Auto Industry Intl. Conference

     The 3rd Iranian Auto Industry International Conference kicked off on Monday in Tehran.

    The two-day event is hosting 363 Iranian and 137 foreign companies from 23 countries.

    Addressing the opening ceremony of the conference, Yong-Geon KIM, the president and CEO of Korea Automobile Manufacturers Association (KAMA), said Iran enjoys potential to become a car manufacturing hub in the region.

    Under the new condition (removal of the West-led sanctions against Iranian economy) Iran is moving in the appropriate way, he said; adding that with a population of 80 million Iran is a big market in the region.

    The automobile industry, the biggest non-oil sector of the Iranian economy, constituting around 10 percent of gross domestic product (GDP), boomed over the decade ending in 2011 due to government support and the dearth of international competitors in the domestic market.     

    Iran ranks 18th on the list of the world’s top auto manufacturers, according to the International Organization of Motor Vehicle Manufacturers (OICA).      

    Global automakers are in a race for new business in Iran following the signing of a nuclear accord between Iran and world powers on July 14, 2015, which ends economic sanctions against Iran in exchange for restrictions on its nuclear program.


  • Are you Investor ?

    World Business Year provides a gateway for high net worth individuals, sophisticated investors and business angel investors to access hundreds of exclusive seed and early stage funding opportunities posted from entrepreneurs and business owners seeking funding to take their business to the next level.

    You can send e-mail  to access these investment proposals, and also to receive filtered investment deal flow based on your investment preferences.

    New for 2016. World Business Year is now featuring Property Investment Opportunities posted from Property developers. Register as an investor if you are interested in investing in  Iran  Property Sector.

    Using World Business Year, Investors can access:
    •    Seed & early-stage investment opportunities
    •    Seeking Funding for Expansion & growth capital
    •    First & Second Round funding opportunities


    If you are looking for Investment Opportunities in different sectors in Iran, please send your requirement to following e-mail:
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  • Best Investment Banks 2016



    Global Finance Magazine published Best Investment Bank in 2016.

    Best Investment Bank

    UBS | In 2015, UBS raised $56.5 billion in bonds plus another $14.0 billion in secured debt for financial institutions alone. In equity, UBS focused on customers like Piraeus Bank of Greece, for which it raised €4.9 billion ($5.5 billion). UBS raised $53.4 billion in 267 equity deals, for a 5.9% worldwide market share. Shareholders price UBS at a book value of 1.1—nearly double that of Citi or Bank of America.

    Best Boutique Investment Bank

    LionTree Advisors | Founded in 2012 by Aryeh Bourkoff, a former head of investment banking for the Americas at UBS, LionTree advised clients on seven mergers and acquisitions, valued at $104.4 billion, in 2015. This New York boutique now has a 3.1% share of the global M&A market, putting it 18th on Dealogic’s league tables.

    Best in Emerging Markets

    HSBC | HSBC was ranked No. 4 in M&A in emerging markets, advising clients on 50 deals valued at $159.1 billion, for an 11.2% market share. It ranked No. 3 in debt capital markets, raising $47.4 billion in 325 deals, for a 3.7% market share.

    Best in Frontier Markets

    Societe Generale | Societe Generale raised $2.3 billion in debt in six deals for its clients in frontier markets, for a 5.5% market share. The bank ranks seventh in frontier markets.

    Best Equity Bank

    UBS | UBS raised $53.4 billion in equity capital in 267 deals, carving out a 5.9% market share and ranking fifth in equity worldwide. The Swiss bank was a bookrunner for a Santander follow-on deal that raised $8.9 billion in the biggest accelerated offering on record in Europe, the Middle East and Africa.

    Best Debt Bank

    Bank of America Merrill Lynch | BofA Merrill Lynch underwrote four of the five largest M&A-related bonds issued last year--for AT&T, Medtronic, AbbVie and Charter Communications. All told, BofA Merrill Lynch underwrote $375.5 billion in 1,819 bond issues.

    Best M&A Bank

    Goldman Sachs | Goldman Sachs is No. 1 on the league tables for M&A, having advised clients on 409 deals valued at $1.8 billion. The Wall Street bank commanded a formidable 36.4% market share.

    Best Up-and-Comer

    Haitong Bank | Haitong Bank acquired Banco Espírito Santo de Investimento of Portugal and by year-end ranked 10th in emerging markets equity, raising $8.5 billion in 81 deals for clients, capturing a 2.8% market share.

    Most Creative

    Itaú BBA | Itaú BBA advised several companies from Brazil, China, Korea and Japan on a $16 billion merger of mining, logistics and industrial assets that entailed complex negotiations across the Pacific.

    Best Bank for Equity-Linked Debt

    UBS | UBS raised GBP500 million ($720 million) for supermarket chain J Sainsbury in two perpetual, nonconvertible hybrid bonds—for the company’s pension and for general purposes—last July.

    Best Bank for IPOs

    UBS | UBS raised $6.2 billion in 36 IPOs in the first nine months of 2015, garnering a 5.1% share of the global IPO market. Its biggest IPOs included: SFr2.2 billion ($2.3 billion) for Sunrise Communications of Switzerland, and €3.4 billion for Poste Italiane, the government post office.

    Best Bank for Securitization

    Citi | Catering to a rekindled interest to diversify risk, Citi was involved in 456 securitizations valued at $92.8 billion in 2015. The Wall Street bank garnered a 6.8% share of the global securitization market.


    Lazard | Lazard advised its clients on 44 mergers and acquisitions in the consumer sector that were worth a total of $248.6 billion last year. The French bank has a 39% share of the global M&A market for consumer-oriented companies.

    Financial Institutions

    UBS | UBS is catering to banks worldwide as they rush to raise capital and meet regulatory standards. In 2015, UBS raised $56.5 billion in bonds—plus $14.0 billion in secured debt—for financial institutions.


    Mizuho | Mizuho was the lead bookrunner for the global healthcare sector’s two largest debt issues in 2015. The Tokyo-based bank raised $21.0 billion for Actavis Funding and $16.7 billion for AbbVie.


    Bank of America Merrill Lynch | Bank of America Merrill Lynch raised more debt for industrial corporations around the world than any other bank in 2015. It raised $24.9 billion in 145 bond deals, claiming a 5.7% market share.


    BBVA | BBVA acted as global coordinator for the IPO of the Spanish government’s airports operator, Aena (now known as Enaire), which raised €4.3 billion. In Colombia, the Madrid-based bank was financial adviser for a $990 million stretch of the 4G Road PPP Program, a nationwide toll road.


    Goldman Sachs | Goldman Sachs advised 26 media and entertainment companies on mergers and acquisitions valued at $182.7 billion last year. The bank has a 49.0% share of the M&A market in the media and entertainment industries.

    Metals & Mining

    BMO Capital Markets | BMO Capital Markets advised on eight deals worth a total $3 billion in the global metals and mining industry last year—more than any other investment bank.

    Oil & Gas

    Citi | Citi raised $16.5 billion in 59 debt deals for oil and gas companies in 2015. The bank ranked first for bond issuance in the sector.


    Macquarie Group | Macquarie Group of Australia raised $4.7 billion in 17 public equity deals for utility and energy companies in 2015—more than any other bank worldwide.

    Real Estate

    UBS | UBS advised NorthStar Realty on its $4 billion acquisition of Griffin-American Healthcare REIT II, which closed in January 2015. The REIT owns 289 commercial buildings in the US and UK.


    Morgan Stanley | Morgan Stanley led an IPO for FitBit that raised $732 million—about $30 million more than expected—last June. The fitness tracking device maker’s share price nearly doubled in less than two months.


    UBS | UBS ran three of the largest telecom IPOs in Europe last year, raising €840 million for Euskaltel of Spain, $2.3 billion for Sunrise of Switzerland, and €875 million for INWIT of Italy.

    Best Investment Bank

    J.P. Morgan | J.P. Morgan raised more money in North America’s equity capital markets than any other bank last year. The Wall Street giant raised $29.7 billion in 212 equity deals, claiming an 11.2% market share.

    Best Boutique Investment Bank

    LionTree Advisors | After only three years in business, New York-based LionTree Advisors has a 5.4% share of the US M&A market, ranking 10th.

    Best Equity Bank

    Morgan Stanley | Morgan Stanley raised a total of $23.3 billion in 171 equity deals in North America last year. The Wall Street giant carved out an 8.7% regional equity market share.

    Best Debt Bank

    J.P. Morgan | J.P. Morgan was No. 1 in North America’s debt capital market in 2015, raising $261.2 billion in 1,108 bond issues for its clients for a 10.2% market share in the US and Canada.

    Best M&A Bank

    Goldman Sachs | Goldman Sachs advised clients on 130 deals worth $539 billion, taking a whopping 41.1% share of North America’s M&A market.

    Most Innovative

    Morgan Stanley | Morgan Stanley was joint bookrunner with Credit Suisse and China Renaissance in the $75 million US IPO for Yirendai, a Chinese marketplace for peer-to-peer unsecured personal loans spun out of CreditEase.

    Best Investment Bank

    UBS | UBS is the only investment bank in Western Europe to have grown its equity capital market share every year since 2012. The Swiss bank raked in $640 million in investment banking revenue across the region last year, garnering a 3.5% market share.

    Best Boutique Investment Bank

    Zaoui & Co. | London-based brothers Michael and Yoel Zaoui have advised companies on M&A valued at about $200 billion since they opened three years ago, including a $14.0 billion Nordic deal last year.

    Best Equity Bank

    UBS | UBS raised $21.7 billion in 81 equity capital market deals for its clients in Western Europe last year. These included more deals above $750 million than any other bank in the region.

    Best Debt Bank

    Barclays | Barclays raised $111.6 billion in 394 bond deals in Western Europe last year—more than any other European bank—and garnered a 7.0% market share.

    Best M&A Bank

    Barclays | Barclays advised clients on 84 mergers and acquisitions valued at $278.8 billion last year—more than any other European bank. In October, Barclays advised Anheuser-Busch InBev on its $117.4 billion acquisition of SABMiller.

    Most Innovative

    Societe Generale | Societe Generale used innovative hybrid structures to raise €1.3 billion in subordinated debt for Bayer, €5 billion in senior unsecured debt for Total, €400 million for Air France-KLM, and €500 million for Gas Natural Fenosa.

    Best Investment Bank

    Nordea | Nordea garnered $116.0 billion in investment banking revenue in the Nordic region in 2015—more than any other bank, according to Dealogic.

    Best Boutique Investment Bank

    Carnegie Investment Bank | This Swedish boutique ranked first in the region’s equity capital market last year, raising $2.1 billion in 43 deals.

    Best Equity Bank

    Nordea | Nordea ran five IPOs in the region last year, one of which raised $370 million for Bravida of Sweden.

    Best Debt Bank

    Danske Bank | Danske Bank ranked No. 2 in the Nordic bond market, raising $15.6 billion for clients in 216 debt deals for a 7.5% regional market share.

    Best M&A Bank

    Deutsche Bank | Deutsche Bank led in the region’s M&A market in 2015, advising clients on eight deals valued at $26.2 billion.

    Most Innovative

    Nordea | Nordea priced an innovative euro-denominated bond to raise additional capital for the Municipality Finance advisory and research company, together with BNP Paribas and Barclays. It carried a 4.5% coupon—the lowest rate on record for such a bond.

    Best Investment Bank

    VTB Capital | VTB Capital ranked second in Eastern Europe’s debt and M&A markets in 2015, raising $5.5 billion in 72 bond deals. VTB Capital also advised clients on 16 M&A deals worth $11.5 billion, earning a 12.4% market share.

    Best Boutique Investment Bank

    Balkan Advisory | Headquartered in Sofia, Bulgaria, Balkan Advisory has advised on more than 150 mergers and acquisitions and other transactions for Holcim, Piraeus Bank, Interbrew, the Privatization Agency of the Republic of Serbia and other clients.

    Best Equity Bank

    VTB Capital | VTB Capital raising $720 million in equity in eight deals that made up a 12.9% share of the region’s relatively subdued equity market in 2015—more than any other East European bank.

    Best Debt Bank

    Societe Generale | Societe Generale was a joint bookrunner for seven bond issues that raised amounts ranging from €3.1 billion to €500 million for the governments of the Slovak Republic, Montenegro, Slovenia, Bulgaria and Poland.

    Best M&A Bank

    J.P. Morgan | J.P. Morgan advised clients on nine mergers and acquisitions in Eastern Europe valued at $13.9 billion, representing a 15% market share—more than any other bank in the region.

    Most Innovative

    Wood & Co. | Based in Prague, Wood & Co. is active in M&A, has underwritten bonds for Kosit, the Slovak waste management company, and has raised equity capital for Banca Transilvania on the Bucharest exchange—where it claims a 26% market share.


    Best Investment Bank

    Itaú BBA | Itaú BBA ranked in first place in Latin America’s M&A market last year, and was the seventh-largest equity capital market provider. It was lead bookrunner for Brazil’s largest equity deal, which raised $5.4 billion for Telefônica Brasil.

    Best Boutique Investment Bank

    Altura Capital | This investment and merchant banking boutique was founded in 2005 by Jay Garcia, formerly of Santander, where he ran Latin American investments, and Salomon Brothers, where he was director of equity research for Latin America.

    Best Equity Bank

    Deutsche Bank | Deutsche Bank was No. 1 in Latin America’s equity market in 2015, according to Dealogic, raising $1.8 billion in three equity deals for a 17.4% market share.

    Best Debt Bank

    Santander | Santander ranked in second place in Latin America's debt market, raising $11.3 billion in 63 bond deals for a 9.9% share in 2015, according to Dealogic.

    Best M&A Bank

    Itaú BBA | Itaú BBA was No. 1 in Latin America’s M&A market in 2015, advising clients on 54 deals valued at $18.8 billion, for a 19% market share.

    Most Innovative

    Bancolombia |Bancolombia took advantage of the fall of the Colombian peso, the downgrade of Brazilian debt to junk status, and falling oil prices to execute 25 transactions that raked in $22 billion in fees during the 12 months through last October.

    Best Investment Bank

    Nomura | Nomura of Tokyo led a triple-whammy IPO that raised a total of $11.9 billion for three units of Japan’s sprawling government postal system. All told, Nomura raked in $727 million in investment-banking revenue in Asia-Pacific last year.

    Best Boutique Investment Bank

    Ivory Capital | Founded by Lehman Brothers alum Christopher Tan in 2002, Ivory Capital focuses on M&A in Asia. Ivory advised Chinese Internet services provider Tencent Holdings on its sale of a Philippine online gaming business to Asiasoft of Thailand.

    Best Equity Bank

    CCB International | CCBI, the Hong Kong-based investment-banking arm of China Construction Bank, was a joint bookrunner for at least eight IPOs on the Hong Kong Stock Exchange during the first seven months of 2015. The largest raised $5.0 billion in H Shares for Huatai Securities.

    Best Debt Bank

    BOC International | Leading China’s international corporate investment-grade bond market, BOC International underwrote 48 bonds in 2015, raising $4.8 billion. The bank underwrote a total $37 billion in debt across the region in 195 deals that constituted a 2.6% market share.

    Best M&A Bank

    Goldman Sachs | Goldman Sachs led Asia-Pacific’s M&A market by a long shot, advising clients on 118 deals valued at $297.6 billion, commanding a 20.7% market share. Some deals involved Japanese companies that spent $10.5 billion to acquire companies in China last year.

    Most Innovative

    Haitong Bank | Haitong Bank of Shanghai is using Portuguese lender Banco Espírito Santo de Investimento, which it acquired last September, as a foothold for Chinese-European deals. It advised Iberwind on the sale of its 684-megawatt wind farm portfolio to Cheung Kong Infrastructure and Power Assets Holdings.

    Best Investment Bank

    SambaCapital | From Q1 2014 through Q3 2015, SambaCapital of Saudi Arabia raised $31.3 billion in 16 syndicated loans in Saudi Arabia, Qatar, United Arab Emirates and around the Middle East. In M&A, Samba advised clients on two deals valued at $5.5 billion.

    Best Boutique Investment Bank

    Mashreq Bank | A local private bank in the UAE, Mashreq arranged $6.1 billion in several syndicated loan facilities in a combination of Islamic and conventional structures.

    Best Equity Bank

    SambaCapital | Samba raised $194 million in an IPO for Electrical Industries, of Saudi Arabia. The bank is now working on a 5,254.8 million Saudi riyal ($140 million) IPO for Middle East Healthcare, which runs hospitals in Saudi Arabia, Egypt and the United Arab Emirates.

    Best Debt Bank

    GIB Capital | GIB led several bond deals in Gulf Cooperation Council countries, including a $1.0 billion sukuk for Islamic Development Bank and two other sukuk that each raised $267 million.

    Best M&A Bank

    J.P. Morgan | J.P. Morgan ranked first in M&A in the Middle East, advising 11 companies on deals worth $52.2 billion, for a 43.8% market share.

    Most Innovative

    Markaz | Also known as the Kuwait Financial Centre, Markaz advised Al Ahleia Insurance in acquiring Kuwait Reinsurance. Triggering a mandatory tender offer allowed Al Ahleia to increase its stake by 62%, taking full control.

    Best Investment Bank

    Standard Bank | Standard Bank of South Africa and its subsidiaries in other African countries were highly active in debt, equity and M&A across sub-Saharan Africa last year. In one debt deal, Standard financed a $700 million medium-term facility for Azura Power West Africa in Nigeria.

    Best Boutique Investment Bank

    Exotix Partners | With seats on Kenya’s and Nigeria’s stock exchanges, London-based Exotix has trading access in 17 African markets. In June, Exotix was the broker for placement of shares that raised $77.4 million for Equity Group Holdings of Kenya.

    Best Equity Bank

    EFG Hermes Investment Banking | Based in Egypt, EFG Hermes raised $394 million in two deals in Africa’s equity capital markets, for a 3% market share.

    Best Debt Bank

    Deutsche Bank | Deutsche Bank ranked first in Africa’s debt capital market in 2015, raising $2.6 billion in nine bonds, for a 13.8% market share.

    Best M&A Bank

    Standard Bank | Standard Bank advised clients on more than 30 M&A deals valued at more than $128.0 billion, in Africa. In April, the bank advised Brait on its $1.6 billion acquisition of an 80% stake in Virgin Active Group.

    Most Innovative

    FBNQuest | The capital markets arm of First National Bank of Nigeria, FBNQuest arranged $880 million in syndicated loans with five Nigerian banks and two UK branches of Nigerian banks for Seven Energy International to finance its Accugas natural gas project.


    PNC Bank | Pittsburgh-based PNC offers M&A advisory, forex trading, loan syndication and customized services for structuring securitized debt. PNC’s total assets more than doubled last year, to $359 billion.


    Commerce Bancshares | With strengths in forex trading and the oil industry, Kansas City-based Commerce Bancshares successfully moved a multinational company in the oil industry from Australia, where its assets were denominated in 50 different currencies, to the Midwest.

    West Coast

    Silicon Valley Bank | Catering to tech start-ups, California-based Silicon Valley Bank has offices in Israel, Shanghai and Hong Kong. It offers loan syndication, forex and derivatives, short-term investment vehicles in different currencies, merchant banking, venture capital and private equity.


    Comerica | Known for its strength in M&A advisory, Comerica, based in Dallas, Texas, grooms small and midsize companies at a crossroads in growth to become attractive acquisition targets.


    SunTrust | Atlanta-based SunTrust is building its investment banking business, opening several offices across the US that offer services from public equity offerings to derivatives sales to advice in structuring real estate investment trusts.


    Scotiabank | Scotiabank raised $21 billion for clients in 131 debt deals for a 7.7% market share.


    Morgan Stanley | With fewer US companies going public in 2015 than in any year since 2009, Morgan Stanley’s $732 million IPO for FitBit stood out. The bank raked in a total $2.7 billion in investment banking revenue.


    Bank für Tirol und Vorarlberg | BTV, headquartered in Innsbruck, ranked first in Austria’s equity capital market last year, raising $99 million in a single deal, for a 20.0% market share.


    BNP Paribas | BNP Paribas ranked first in both debt and equity in Belgium, raising $32 million in six equity deals and $4.6 billion in 18 bond issues.


    AXIA Ventures Group | Based in Nicosia, AXIA is focused on Cyprus, Greece and Portugal. It was joint bookrunner of a €2.0 billion capital increase for Eurobank Ergasias and advised Alpha Bank on a €2.6 billion capital increase.


    Danske Bank | Danske Bank raised $15.6 billion for its clients in 216 debt deals in the Nordic region, for a 7.5% market share.


    Pohjola Bank | OP-Pohjola is the largest bank in Finland, providing investment banking services to corporate clients as well as trade finance services such as foreign bank guarantees and letters of credit.


    Societe Generale | Societe Generale ranked second in France’s bond market, raising $27.1 billion in 131 deals. It was also second in France’s equity market, raising $3.3 billion in 25 deals.


    Galt & Taggart | A subsidiary of Bank of Georgia, Galt & Taggart set up a $50 million mezzanine fund last year, focusing on eight to 10 high-potential companies in Georgia, investing $2 million to $8 million per project.


    Deutsche Bank | Deutsche Bank ranks first in M&A in Germany, where it advised on 34 deals with a value of $52.1 billion, for a 31.4% market share.


    Kvika banki | Kvika, Iceland’s leading investment bank, is a direct member of stock markets in Reykjavík, Copenhagen, Stockholm, Tallinn, and Riga, and in Vilnius through the Nasdaq stock exchange partnership.


    Davy Group | The leading broker on the Irish stock market, Davy is a Dublin-based investment bank with four core businesses: asset management, capital markets, corporate finance and research.


    UniCredit | UniCredit is No. 1 in both equity and debt financing in Italy. In 2015, the bank raised $18.7 billion for its clients in 99 bond deals and $2.4 billion in 11 equity deals.


    ABN Amro | ABN Amro ranked fifth in the Netherlands’ equity capital markets, raising $1.7 billion in 10 deals. It went public in November, raising €3.3 billion, enabling the government to recoup some bailout funding.


    Nordea | Nordea issued more loans than any other bank in Norway from the Q4 2014 to Q3 2013—26 loans, for a total of $2.8 billion—and claimed a 13.7% market share, excluding syndicated loans.


    PKO Bank Polski | PKO was No. 1 in equity in Poland, raising $304 million in seven equity deals, for a 21.2% market share.


    CaixaBI | CaixaBI is No. 1 in Portugal’s debt capital market, raising $2.0 billion in 12 deals in 2015. One deal raised $200 million in floating rate notes for pulp and paper company Portucel Soporcel.


    VTB Capital | VTB Capital ranks first in Russia’s equity capital market, having raised $720 million in eight deals in 2015. The bank leads eight of 10 equity deals in the country.


    BBVA | Last year, BBVA advised its clients in 14 M&A deals in Spain and other countries. BBVA also underwrote 41 bonds that raised $9.8 billion, taking second place in Spain’s debt capital market.


    Carnegie | Carnegie is No. 1 in equity in Sweden; it raised $1.7 billion in 23 deals to win a 19.1% market share.


    UBS | In Switzerland’s biggest IPO since 2006, UBS raised $2.3 billion for Sunrise Communications. The Swiss bank also advised its clients on 10 mergers and acquisitions worth a total of $14.1 billion.


    IS Investment | IS Investment advised its clients on nine mergers and acquisitions, valued at $812 million, for a 27% share of the country’s M&A market.

    United Kingdom

    Barclays | Barclays ranked second in the UK’s debt capital market last year, raising $28 billion in 98 issues that made up a 10.4% market share.


    Bank of America Merrill Lynch | BofA Merrill Lynch was No. 1 in both equity and debt in Argentina. It raised $1.3 billion in just four bond issues—and $81 million in a single equity issue.


    Bradesco BBI | Bradesco BBI is No. 1 in Brazil’s debt capital market. The Brazilian unit of Santander raised $5.5 billion in 31 deals, for a 19.8% market share.


    Banchile Inversiones | Banchile, which is owned by Citi, advised clients on five M&A deals worth a total of $2.9 billion in 2015, garnering a 28.8% market share.


    Bancolombia | Bancolombia executed 25 transactions from Q4 2014 to Q3 2015 that added up to $5.1 billion. It arranged the market debut of a niche bank as well as Colombia’s largest airport project finance.


    BBVA CIB | BBVA CIB raised $329 million in four deals for a 5.5% share of Mexico’s equity capital market in 2015. It was sole financial adviser to Petróleos Mexicanos on the sale of its 50% stake in Gasoductos de Chihuahua.


    Credicorp Capital Perú | Credicorp, the largest financial services company in Peru, underwrites bonds, serves as a bookrunner for equity issues and offers M&A advisory. It also owns Banco de Crédito del Perú.

    Puerto Rico

    Banco Popular | With $28.5 billion in assets, Popular is the leading financial institution in Puerto Rico. Its investment banking unit, Popular Securities, provides investment consulting services to companies and institutions.


    Ameriabank | With a 42% local market share, Ameriabank is the only bank in Armenia with a dedicated capital markets team. It underwrites Armenian dram-denominated bonds.


    Macquarie Group | Macquarie Group ranked second in Australia’s M&A market, advising its clients on 49 deals worth a total $44.9 billion. It ranked second in Australia’s equity capital market, raising $7.9 billion in 45 deals.


    Bank of China International | BOCI executed about 50 bond transactions in 2015, raising $500 million for Baosteel Hong Kong Investment and $250 million for Future Land Development Holdings.

    Hong Kong

    CCB International | In the 12 months through last September, CCB International advised clients on 10 mergers and acquisitions worth a total $1.3 billion. In the largest deal, Comec acquired stakes in China Shipbuilding Corporation’s Huangpu Wengchong and Yangzhou Kejin.


    AXIS Bank | AXIS Bank ranks in first place in India’s debt capital market, having raised $6.3 billion in 147 bond issues last year. These deals made up a 16.7% market share.


    Mandiri Sekuritas | Mandiri raise $507 million for its clients in four equity deals that made up a 13.5% market share in Indonesia in 2015. The Jakarta-based bank also raised $512 million in bonds for Telkom, Indonesia’s largest telecom utility.


    Nomura | Nomura is No. 1 in equity in Japan, having raised $12.9 billion for its clients in 81 deals last year. Before raising $11.9 billion in equity for Japan’s postal system in October, Nomura underwrote $847.6 million in bonds for the Japanese telecom SoftBank in June.


    Kazkommerts Securities | Kazkommerts Securities commanded a 45% share of Kazakhstan’s corporate bond market in 2015, leading a total of 16 debt deals for its clients.


    CIMB | CIMB is No. 1 in Malaysia’s debt capital market. The Kuala Lumpur–based bank raised $6.4 billion in 54 bond issues that made up a 22.3% market share in 2015.

    New Zealand

    Macquarie Group | Macquarie Group is No. 1 in New Zealand’s equity capital market, having raised $1.2 billion in a single deal that made up a 45.8% market share.


    Habib Bank | Habib Bank raised a record $1.0 billion in an IPO in April 2015 as part of the Pakistan government’s privatization program. The Karachi-based bank arranged a $215 million sukuk bond for the Pakistani utility K-Electric Ltd. to finance foreign debt last summer.


    First Metro Investment | First Metro Investment commands a 30.4% share of the Philippines’ equity capital market. The Manila-based bank raised $617 million in three equity deals last year.


    DBS Bank | DBS is No. 1 in Singapore’s debt capital market. The bank raised $5.8 billion in 56 equity deals for its clients, garnering a 31.5% market share in 2015, according to Dealogic.

    South Korea

    NH Investment & Securities | NH is No. 1 in South Korea’s equity capital market. The Seoul-based bank raised $2.2 billion in 21 deals that made up a 20.7% market share in 2015.


    CTBC Bank | CTBC is a leader in syndicated loans in Taiwan, including raising $960 million for Taiwan Broadband Communications. The Taipei-based bank also raised raising $283 million in 16 equity offerings.


    Bangkok Bank | Together with subsidiary Bualuang Securities, Bangkok Bank raised a total of $15.9 billion in six IPOs, a long list of investment-grade bonds, and a few sovereign issues for the government of Thailand.


    Vietnam Capital Partners | Based in Ho Chi Minh City, Vietnam Capital partners has advised ASE Group of Taiwan on an $800 million acquisition. It served as an adviser to Citi in the $800 million acquisition of a 30% stake in another Taiwanese company.


    GIB Capital | Manama-based GIB was the lead manager of a $1.0 billion sukuk for the Islamic Development Bank, and two other sukuk that each raised $267 million—one for Abdullah Al-Othaim Real Estate & Development, and the other for Saudi Binladin Group—in 2015.


    CI Capital Investment Banking | CI Capital raised $64.4 million in a secondary equity offering for Orascom Hotels & Development in January 2015. Last July, the Cairo-based bank placed $87.6 million in equity in Misr Cement, a local cement company, with local investors.


    Migdal Investment Banking | Migdal advised Ability Computers & Software Industries on its sale to Cambridge Capital Acquisition in December for $290 million. Migdal also underwrote several bond deals, including a $190 million public debt issuance by finance company Dexia.


    J.P. Morgan | J.P. Morgan raised $995 million in two bond deals that made up 50% of Jordan’s debt capital market in 2015.


    Markaz | Markaz completed 14 deals in the first nine months of 2015 and advised several companies on debt restructuring and disposal of assets.


    bankmed | The volume of bankmed’s private placement deals quadrupled in December 2015 compared with a year earlier, according to the bank.


    Bank Muscat | Bank Muscat is No. 1 in debt capital markets in Oman. Bank Muscat raised $5.6 billion for clients, including two bonds that raised $1.2 billion. It also raised $1 billion for Oman Electricity Transmission.


    Qatar National Bank | Qatar National Bank ranks in fifth place in the country’s equity capital market. The bank raised $166 million in an equity offering that garnered an 8.2% market share.

    Saudi Arabia

    SambaCapital | SambaCapital raised $560 million in two bond deals in Saudi Arabia, taking a 12.2% share of the local bond market in 2015, according to Dealogic.


    National Bank of Abu Dhabi | National Bank of Abu Dhabi ranked No. 1 in local market share for debt capital markets, underwriting $1.6 billion worth of bonds in 12 deals, for a 12% market share.


    Standard Bank Angola | Standard Bank Angola arranged a $180 million loan for a government hydroelectric power project. It also arranged a $29.5 million credit facility for a local supermarket chain.


    Industrial & Commercial Bank of China | ICBC ranked first in Ghana’s debt capital market. The Beijing-based bank raised $500 million in a bond issue in Ghana in 2015.


    CfC Stanbic Bank | CfC Stanbic Bank raised $35 million in a public equity deal that comprised all of Kenya’s public equity market last year, and underwrote $200 million of a $750 million syndicated loan for the government.


    Mauritius Commercial Bank | Mauritius Commercial Bank, the largest bank in the island nation, is an integrated financial group offering a range of corporate services, including investment banking, from Mauritius to Madagascar.


    Attijariwafa Bank | Attijariwafa Bank ranked first in Morocco’s equity market. The bank raised $37 million in an IPO for the Moroccan unit of Total.


    Standard Bank Moçambique | Standard Bank Moçambique provided Portos e Caminhos de Ferro de Moçambique with $120 million in debt to help raise the capacity of the Sena Line coal-carrying railroad to 6.5 million metric tons a year.


    FBNQuest | FBNQuest was initial mandated lead arranger for an array of syndicated loans for Seven Energy International to finance its Accugas natural gas project, the complex deal raised $880 million in debt.

    South Africa

    Rand Merchant Bank | Rand Merchant Bank advised clients on seven mergers and acquisitions worth $7.1 billion. The Johannesburg-based bank also raised $1.2 billion for clients in 11 public equity deals.

    Best Equity Deal
    $8.9 billion Santander follow-on offering

    Arrangers: UBS (Europe) and Goldman Sachs (U.S.)

    Santanders $8.9 billion follow-on secondary offering was the world’s largest equity deal of 2015, offering nearly 1.3 billion shares at a discount to institutional investors to improve the bank’s capital position.

    Best Debt Deal
    $17.5 billion AT&T bond sale

    Lead bookrunner: Bank of America Merrill Lynch

    In the second-largest debt capital market raising of 2015, BofA Merrill Lynch raised $17.5 billion in investment-grade corporate bonds for AT&T, helping finance the telecom company’s acquisition of DIRECTTV.

    Best M&A Deal
    $160 billion acquisition of drugmaker Allergan by Pfizer

    Advising Pfizer (acquirer): Morgan Stanley

    Advising Allergan (target): Goldman Sachs

    Pfizer announced last November that it was acquiring Allergan, which makes Botox, in a $160 billion deal that, if approved by regulators, will create the world’s largest drugmaker.

    Best Infrastructure Deal
    €4.26 billion IPO for Aena

    BBVA of Madrid acted as global coordinator for the IPO of the Spanish government’s airport operator, Aena, which raised €4.26 billion in February 2015.

    Best Bank for Equity Derivatives

    Societe Generale | Societe Generale has taken full advantage of the transformation of the global derivatives market over the last five years from trading by phone based on personal relationships to relatively transparent exchange-trading.

    Best Bank for Credit Derivatives

    Citi | Citi has grown its fixed-income derivatives business dramatically in recent years by focusing on over-the-counter trading. The bank responded to demand from clients in the US as the derivatives business migrated onto exchanges in response to new regulation.

    Best Bank for Interest-Rate Derivatives

    Societe Generale | Societe Generale grew its market share for interest-rate derivatives last year with an advisory-based approach. The bank helped clients manage risk with a commitment to full service, from idea generation to electronic execution and clearing.

    Best Bank for Equity Derivatives

    Morgan Stanley | Morgan Stanley received higher marks from its clients than any other provider of equity flow derivatives and equity swaps in North America, in a survey by Greenwich Associates.

    Best Bank for Credit Derivatives

    Citi | Citi commands an 18% share of the market for fixed income derivatives in the US, more than any other bank.

    Best Bank for Interest-Rate Derivatives

    Citi | Interest rate swaps have traditionally accounted for more than half of Citi’s derivatives business in North America.

    Best Bank for Equity Derivatives

    Societe Generale | Societe Generale earns top marks from clients for its European equity swaps. Greenwich Associates research cited its low pricing, willingness to put capital to trades, and superior customer service.

    Best Bank for Credit Derivatives

    BNP Paribas | BNP Paribas has long been regarded as Europe’s most cost-effective and active provider of credit indexes and bank credit default swaps.

    Best Bank for Interest-Rate Derivatives

    Societe Generale | SG’s market share in European currency interest rate swaps has tripled from about 3% in 2006 to more than 9% currently.

    Best Bank for Equity Derivatives

    Societe Generale | Societe Generale is a market leader in correlation solutions in Japan, Korea and Taiwan, and has pan-Asian exposure to equity markets, leading in hybrid derivatives.

    Best Bank for Credit Derivatives

    HSBC | HSBC has established itself as the clear market leader for Asian fixed-income derivatives, with an 11.8% market share.

    Best Bank for Interest-Rate Derivatives

    BNP Paribas | BNP Paribas has the second-largest market share for interest-rate derivatives in Asia and commands a 10.2% market share.


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    This article appeared in issue April 2016

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  • Big Oil faces big transition


    Big Oil faces big transition
    After the most tumultuous year that Big Oil has endured in decades, the industry is rapidly trying to reshape itself for a new era in energy as the world accelerates the transition away from fossil fuels

    In a period that has seen record lows and highs for gas, negative oil prices, more wells being abandoned than ever before, and drilling programmes slashed, the general consensus is that Big Oil is in trouble. Also, the industry faces pressure on all sides as the momentum turns against fossil fuels because of the looming threat of global warming. “If the world acts decisively, the scale of change will revolutionise the energy industry,” predicts international consultancy Wood Mackenzie in a landmark study released in April 2021 that foresees an “upending of oil and gas markets” as demand for oil shrinks and prices progressively collapse. As fossil fuels lose dominance in the energy mix, the oil giants are expected to lose their long-held power. “The steep fall in demand will prevent these key oil producers from managing the market and supporting prices in the way they do today,” Wood Mackenzie forecasts. “Only the lowest-cost producers such as the Middle East members of OPEC will remain core providers of oil.”


    Preparing for a revolution
    In this scenario Big Oil has 30 years – at the most – to prepare for this new era. That is the broad consensus of the latest reports into an industry that has kept the lights on for the best part of a century and powered nearly all of the world’s transportation. Demand for oil is expected to begin a long decline as soon as 2023, according to some forecasts. By 2030, the price per barrel could fall from today’s $60–70 on the Brent index to an average of $40 by 2030 and as low as $10 by 2050.

    The vast refining industry is certain to suffer. “The scenario is grim for the downstream sector,” predicts Wood Mackenzie’s vice-president of refining and chemicals, Alan Gelder, who expects that all but the most efficient refineries will be shuttered. “The refining sector will have withered to a third of its current capacity,” he says. The challenge is how to slash fossil fuel-triggered emissions without running out of energy before renewables can take up the slack.

    According to the Environmental Protection Agency in the US, the level of greenhouse gas emissions (GHG) in America, one of the world’s biggest users of energy per capita, fell by 1.7 percent between 2018 and 2019. And since 2005 they have plummeted by nearly 11.6 percent, largely because of increased use of ‘greener’ natural gas. “This is noteworthy progress and supports the larger point that natural gas is critically important in addressing the risks of climate change,” approved the EPA in early 2021.


    Turning a blind eye
    But is Big Oil ready for the revolution? Not according to Wood Mackenzie, which says “no oil company is prepared for the scale of change envisioned.” In the consultant’s scenario, “all companies face a decline with asset impairments and bankruptcy or restructuring on a scale far greater than that of 2020.”

    Also, many countries have their heads in the sand, especially in Latin America, Africa, the Middle East and Asia, where entire nations rely on revenues from fossil fuels. According to a joint analysis by the OECD and International Energy Agency (IEA), in 2019 governments pumped over half a trillion dollars into subsidising the fossil-fuel industry. “The data show a 38 percent rise in direct and indirect support for the production of fossil fuels across 44 advanced and emerging economies,” the study noted. The findings provoked a scolding from OECD secretary-general Ángel Gurría, who criticised “an inefficient use of public money that serves to worsen greenhouse emissions and air pollution.”

    However, some oil giants have seen the light. “After 112 years, we are pivoting from being an international oil company to an integrated energy company,” explained BP chief executive Bernard Looney in April. “We plan to be very different by 2030, reducing our oil and gas production by 40 percent and raising our low carbon investment 10-fold.”

    Demand for oil is expected to begin a long decline as soon as 2023, according to some forecasts

    Royal Dutch Shell has also recognised the dangers. In mid-April, chief executive Ben van Beurden took the unprecedented step of asking shareholders to approve a strategy that has set a target of net-zero emissions by 2050, in line with the Paris Accord. “We are asking our shareholders to vote for an energy transition strategy that is designed to bring our energy products, our services, and our investments in line with the goals of the Paris Agreement and the global drive to combat climate change.”

    In concrete terms, Shell will embrace biofuels, electric charging stations, hydrogen and other renewable forms of power as well as the coming technology of carbon capture and storage (CCS). In the interim period though, Shell has no intention of axing its vast oil and gas operations which are fundamental to the current energy mix. “Ending our activities in oil and gas too early when they are vital to meeting today’s energy demands would not help our customers or our shareholders,” the chief executive warned in a 32-page explanation of the energy transition.


    The switch to green
    During the transition period to a mainly renewably powered future, low cost ‘green’ gas will become king as it steadily replaces coal and oil. According to the IEA, liquefied natural gas (LNG) will play an essential role in lowering global CO2 emissions. “In the generation of electricity, gas emits 50 percent less CO2 than coal,” points out US source RealClear Energy.

    Meanwhile, the Biden administration has set America on an unstoppable course of clean energy, completely reversing the previous president’s policy of supporting Big Oil. Until Democrats took control of the White House, the trade body, American Petroleum Institute (API), was an unabashed supporter of Trump and fossil fuels in general, to the point of deriding renewables. The French giant Total, which has also set itself on a renewables course, resigned in disgust from the institute in January, while BP and Shell among others say the only reason they haven’t quit is because they believe they can reform it from within.

    Lately though, the API may be acquiring religion. In March 2021, the institute issued a blueprint for the future that cited the importance of “tackling the climate challenge.” And president Mike Sommers, who spent much of 2020 praising president Trump’s anti-renewables policy, now sees Big Oil taking a lead in developing the technology necessary to achieve the great transition. “There’s nobody better equipped to drive further progress than the people who solve some of the world’s toughest energy problems every day,” he said.


    Part of the solution
    The API’s new tune could be put down to mounting evidence of climate change in the US. According to the US Drought Monitor, cited by Energy Bulletin, 2020 was the worst year for droughts in more than 20 years, with vast areas seeing little or no rain.

    Big Oil could also play an important role in the transition. Blessed with much deeper pockets than most of the renewables companies, the industry has the financial firepower to change direction. Some of the oil giants are already leaders in the important but extremely costly technology of carbon capture that essentially traps the carbon dioxide that is produced by burning fossil fuels and isolates it from the atmosphere before, in some instances, reusing it. The US alone boasts 12 commercial-scale facilities that collectively handle about 25 million metric tonnes of CO2 a year.


    In a highly volatile industry where abrupt fluctuations in fortunes mask long-term trends (see Fig 1), the tea leaves can be hard to read. In early April for instance, the price of a barrel of oil hit $66.09, up a promising 30 percent since the start of 2021. Yet most experts predict a steady retreat over the long-term. And herein lies an opportunity, according to the IEA’s executive director Dr. Fatih Birol. “Today’s low fossil fuel prices offer countries a golden opportunity to phase out consumption subsidies,” he said.

    But will they take the opportunity? In its latest meeting, energy cartel OPEC shocked markets by tightening the taps to keep oil scarce and push up prices. As a result, in what may be one of the last flurries for oil, the Brent price approached $70 and some analysts forecast it could hit $100 or higher in 2022.

    On one issue though, nobody is divided. Namely, demand for oil and especially gas will increase for a few years yet. “Fossil fuels are still seen as growing at least through the 2030s, even as renewables usage rises in popularity and affordability,” predicts Energy Bulletin published by America’s Post-Carbon Institute.

    But the next 10–30 years will see the end of Big Oil as we know it, according to most forecasters. Citing an unlimited supply of sun, wind and water, they say that over the long term renewable energy will usher in an era of cheap electricity with the use of infinite and low-cost resources.

    Backing up that claim, numerous research institutions such as America’s National Renewable Energy Laboratory, Bloomberg New Energy Finance and International Energy Agency are in no doubt that the capital costs of solar and wind will continue to decline well into the future. The writing really is on the wall.

  • CBI Governor says Iran has emerged from recession




    Central Bank of Iran Governor Ali Salehabadi said on Saturday that the economy of the Islamic Republic of Iran has seen growth in Q2 2021 despite the coronavirus pandemic and this indicated that the country has emerged from recession.

    In a virtual meeting attended by International Monetary Fund Chairwoman Kristalina Georgieva, as well as central banks governors and chairs of financial institutions of the MENAP region, held on Saturday, Salehabadi said that just like many other countries, Iran was severely hurt by the coronavirus pandemic, but its economy is now on a strong path of improvement.

    The latest statistics show a 6.2 percent growth in Iran GDP in Q2 2021 which is a great achievement despite tight restrictions on Iran's access to its funds abroad, CBI Governor added.

    Iran’s non-oil economy grew by 4.7 percent in the same period, according to Salehabadi, indicating that Iran's economy has significantly climbed out of recession and moved towards improvement.

    Salehabadi also said that unemployment retreated to 8.8 percent in Iran in Q2 2021 thanks to CBI and the administration’s supportive financial and monetary policies.

    The official criticized the inequality in economic recovery among world regions and also in countries' access to the coronavirus vaccine resulting in different economic recovery processes.

    No country is safe unless all the countries are protected against the virus, Salehabadi said, noting that any delay in vaccination in countries would pose a threat to the global economic perspective.

    SDR allocation process in 2021 cannot help IMF member states meet their long-term COVID-19 vaccine demands, he underlined.

    CBI Governor expressed support to the IMF’s new initiative to help members address climate change challenges, adding that the burden of climate change has been put on the countries with the minimum share in carbon emission.

    He proposed that neighboring countries make multilateral funding and rich countries share their technological knowledge to better address climate change.

کتاب عملیات بانکی در عرصه بین الملل -سرفصل ها،ضمائم ،توصیه صاحب‏نظران ارزی و مدیران ارشد بانکی

Investment Consulting &Project Finance


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