The contracts were signed in the Austrian capital of Vienna by an Iranian banking delegation which included representatives of 14 domestic banks headed by Mohammad Khazaei, the president of the Organization for Investment Economic and Technical Assistance of Iran. Deputy Head of the Central Bank of Iran (CBI) for Foreign Exchange Affairs Ahmad Araqchi was also a member of the delegation.

The first major finance deal worth €1 billion was signed on Thursday between Austria’s Oberbank and a dozen Iranian banks. The Austrian bank thus became one of the first European financial institutions to break the ice in providing loans for Iranian projects following the removal of Western sanctions in early 2016.

Oberbank, Austria’s seventh-biggest bank, with a balance sheet of roughly €20 billion ($24 billion), signed the deal with 14 Iranian banks at its headquarters in Linz.

President of the Organization for Investment, Economic and Technical Assistance of Iran Mohammad Khazaei (2nd L) and Oberbank’s Chief Executive Franz Gasselsberger (2nd R) attend a press conference following the signing of a major finance deal between 14 Iranian banks and the Austrian bank in Vienna on September 21, 2017.

The move was groundbreaking particularly given that many banks — mainly those from Europe — are still standing away from Iran’s funding prospects over fears that they may fall afoul of remaining US sanctions against the Islamic Republic.

Officials in Tehran are hoping that this would set the stage for similar moves by other European banks in the near future.

The Iranian signatories included veteran private banks such as Parsian Bank, Saman Bank, Eqtesad Novin Bank, Bank Parargad, Karafarin Bank and the newly established Middle East Bank. Others were former state banks that were privatized over the past few years such as Bank Melli Iran, Bank Mellat, Bank Sepah, Tejarat Bank, Bank of Industry and Mine, Export Development Bank of Iran, Refah Bank and Keshavarzi Bank.

The agreement which envisages a funding ceiling of €1 billion covers projects by Austrian companies in Iran’s production and development projects lasting more than two years.

Speaking on the sidelines of the signing ceremony, Oberbank’s Chief Executive Franz Gasselsberger said, “Today was a great day in the two countries’ relations as this was the first finance deal between a European bank and the Islamic Republic of Iran. Although the negotiations on the deal took long for several months, the outcome was quite favorable and satisfying for both sides.”

He added the contract will prepare the ground for Austrian companies and industries in different sectors, particularly health and infrastructure, to invest in Iranian projects and export products and modern technologies to the Middle Eastern state.

“In case on some day in the future, we look back at this day, we will realize that this contract has served as a turning point for the two sides to deepen their relations.”

Gasselsberger said Iran’s economy, in addition to those in Austria and other European countries, is extremely attractive for the entire world as the Middle Eastern state has a hardworking and smart young generation that can create great opportunities for their own country and other nations.

“There must be a win-win situation for Iran and international companies. Nevertheless, we should not forget about political aspects.”

Earlier in September, Gasselsberger told Reuters that the agreement covered projects by Austrian companies in areas that were previously under sanctions.

“We have very concrete projects in the fields of infrastructure, rail, health, hospital construction, factory building, photovoltaics, hydro power,” he had stressed.

Export credit guarantees covering 99 percent of a project’s volume will be provided by the Oesterreichische Kontrollbank, the main Austrian body that issues them, Reuters added.

“The sticking point was obtaining an additional guarantee from the Iran,” Gasselsberger said. “We negotiated with the Iranian central bank but the guarantee is evidently coming from the Iranian Finance Ministry.”

President of the Organization for Investment, Economic and Technical Assistance of Iran Mohammad Khazaei (C) at the signing ceremony of a finance deal worth €500 million with representatives (R) of Denmark’s Danske Bank in Vienna on September 21, 2017.

Deal with Denmark’s Danske

The other finance contract, very similar to the one with the Austrian bank, was also signed on Thursday, between the Iranian team and Denmark’s Danske Bank.

The deal is worth €500 million and sees 10 Iranian banks on the receiving end. Following the contract the Danish bank became the second European lender to ink such an agreement with Iran.

The Iranian signatories to the agreement were Saman Bank, Bank Mellat, Tejarat Bank, Bank Melli Iran, Bank of Industry and Mine, Bank Sepah, Bank Pasargad, Eqtesad Novin Bank, Keshavarzi Bank, and Parsian Bank.

They will act as the agent banks, providing civil projects in Iran with the Danish fund, according to an announcement by the website of the Central Bank of Iran.

Danske Bank, founded in 1871 and headquartered in Copenhagen, is the largest bank in Denmark and a major retail bank in the northern European region with over five million retail customers. It was number 454 on the Fortune Global 500 list for 2011.

MoU on infrastructural projects

In addition, the Iranian delegation also signed an MoU late on Thursday with the EKF Bank of Denmark to finance infrastructural projects in Iran.

The memo will make it possible to finance Iranian projects in various sectors later.

The deals with Oberbank and Danske came on the heels of a similar move between China’s CITIC Group and a consortium of Iranian banks to provide loans worth a collective of $10 billion for the country’s infrastructure projects.

Iran had also in late August secured an €8-billion credit line from South Korea’s Eximbank — what was seen as the country’s biggest loan deal since the removal of sanctions against it in early 2016.

Accordingly, officials in Seoul said the deal would finance projects in Iran by companies from South Korea.

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Gholamali Kamyab said attracting $10 billion of foreign finance has been defined as a project for the CBI in the area of Resistance Economy, Tasnim News Agency reported.

He made the remarks in a meeting with CBI officials, which was attended by First Vice-President Es’haq Jahangiri in Tehran.

The measures taken by the CBI in this regard include extensive talks with some foreign banks, such as the Export–Import (Exim) Bank of China, Italy’s Mediobanca and Denmark’s Danske Bank, he noted.

The CBI vice governor added that up to now, 72 percent of the project has been implemented.

There has been a new wave of interest in ties with Iran since Tehran and the P5+1 group of countries – Russia, China, the US, Britain, France and Germany – reached a deal on Iran’s nuclear program in 2015.

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

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Nahavandian made the proposal to the Swedish Minister of Finance Magdalena Andersson and the Minister of EU Affairs and Trade Ann Linde in separating meetings in Stockholm on Saturday, Fars News Agency reported.

During the meetings, Nahavandian underlined the need to accelerate the trend of promoting Tehran-Stockholm relations through a comprehensive program.

He said the two countries should finalize the banking talks at the earliest to facilitate economic exchanges.

The Iranian government, he said, is resolved to attract optimum foreign investment.

For her part, Linde said that her country has planned for promoting economic relations with Iran.

Andersson also said in her meeting with Nahavandian that Stockholm attaches great importance to ties with Tehran.

Andersson further stressed that Sweden and Iran should resume cooperation as Tehran was once Sweden’s biggest trade partner before the sanctions’ era.

In relevant remarks in early June, Swedish Foreign Minister Margot Wallstrom in a meeting with her Iranian counterpart Mohammad Javad Zarif in Stockholm called for the expansion of relations between the two countries.

“There is a need for enhanced cooperation between Iran and Sweden under present conditions,” Wallstrom said.

The Swedish foreign minister reiterated that following the nuclear agreement between Iran the six world powers (the US, Russia, China, France, Britain and Germany) in July 2015, the time is ripe for Iran and Sweden to expand all-out relations.

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The Governor of BHF-Bank Hans- Günter Wiesenack said several opportunities exist for collaborations and the German bank seeks to strengthen monetary ties with Iran.

He recalled barriers to deepening relations with Iran during sanction years adding “tough days are over and constructive cooperation has become an attainable goal.”

“So far, several sessions have been held between BHF-Bank and Central Bank of Iran (CBI),” underlined Wiesenack suggesting 30 to 40 years of cooperation with the Iranian IMIDRO.

The official stressed that formation of a metal department in the private banking company has elevated level of international relations.

Head of Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) Mehdi Karbasian, for his part, referred to inking of documents for cooperation between Iran and a number of European companies during President Rouhani’s earlier visit to Europe and removal of problems with French Kofas and German Hermes companies saying “many earlier financial challenges are now resolved.”

He went on to note that mining and mineral sectors of Iran have numerous plans on the agenda of the coming five years which highlight the importance of banking sector as well as financial and insurance sectors.

“A total of 30 billion dollars of projects have been defined for the mine and mining industries,” underscored Karbasian voicing the country’s readiness to absorb the capital in order to finance the projects.

He pointed to the positive background of the German bank will make a more serious presence in Iranian projects in order to prevent delays.

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Oman’s Bank Muscat SAOG, Woori Bank of South Korea and India’s UCO Bank Ltd. are all in the process of establishing a presence in Tehran, CBI Vice Governor Peyman Qorbani said Tuesday in an interview. He declined to give further details, Bloomberg wrote.

Major European banks have kept their distance from Iran, despite its nuclear deal with world powers, for fear of running foul of remaining US sanctions.

Central Bank of Iran Governor Valiollah Seif said progress with foreign banks has been “slow,” IRNA reported in September.

Austrian and Iranian bankers met in Vienna in September to discuss the resumption of trade financing, people with knowledge of the plans said at the time.

Austria’s top three banks, Erste Group Bank AG, UniCredit Bank Austria AG and Raiffeisen Bank International AG would be among the participants, according to the people, who asked not to be identified.

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