National Development Fund’s Role in 7th Development Plan Highlighted

Exclusive report from Iran-Canada: Dr. Mehdi Ghazanfari, Chairman of the National Development Fund (NDF), emphasized the critical challenges facing the Fund over the past decade, primarily the lack of proper understanding of its mission. Speaking at the 4th International Conference on the National Development Fund, he stated that the NDF is a protective, and at minimum, a developmental institution. He stressed that the Fund’s resources must be transformed into enduring, productive, and wealth-generating economic assets.

Dr. Ghazanfari noted that despite clear mandates outlined in its statutes, some entities and officials have attempted to operate outside the legal framework, which is unacceptable. Highlighting the Fund’s achievements, he revealed that the NDF has supported 360 foreign currency projects and provided over $36 billion in loans or deposits. He also announced new plans to offer local currency loans for small projects through various banks to develop industrial, agricultural, and other sectors.

Regarding the Capital Market Stabilization Fund, he mentioned its creation by the previous administration to manage market shocks. In the current government, about $26.8 billion has been allocated for its various operations. Dr. Ghazanfari also disclosed that governments have borrowed approximately $100 billion from the NDF over the years, with repayment plans in place. He highlighted that the oil, gas, refineries, and power plants sectors have received the most foreign currency loans from the Fund.

The 4th International Conference on the National Development Fund, focusing on its role in the 7th Development Plan, was attended by the NDF’s chairman, board members, deputies, the Minister of Communications and Information Technology, the Head of the Court of Audit, the Head of the General Inspection Organization, senior officials from the Ministries of Oil, Economy and Finance, the Planning and Budget Organization, CEOs of Mellat and Sina Banks, senior executives from engineering and contractor firms, ambassadors from various countries, private sector representatives, industry associations, and the Chamber of Commerce at the IRIB International Conference Center.

Addressing criticisms about the non-repayment of NDF resources, Dr. Ghazanfari stated that the Fund is evaluating whether it should limit itself to loans or also utilize other financial instruments. He added that in the past two months, the NDF has provided $14 billion in loans for various projects, including renewable energy, emphasizing that the Fund aims to foster sustainable development and environmental preservation without replacing the private sector. The NDF seeks a non-interventionist investment model, focusing on project financing and risk reduction rather than ownership. He introduced the I-HOPE model, which involves the Fund in five stages: financing, implementation, production, operation, and eventual exit strategies.

Dr. Ghazanfari acknowledged that the NDF has not been profitable and thus must reduce loan risks. He noted that the commitment rate of agent banks to the Fund’s resources is about $8 billion out of $25 billion, and the NDF aims for timely loan repayment and revenue generation.

He also announced that the NDF will invest in artificial intelligence this year, pledging to finance 2.5 trillion tomans out of the 5 trillion tomans needed for AI operator development, citing its high growth potential and rapid return on investment.

In a session with senior economic officials, experts discussed the NDF’s role in the 7th Development Plan. Panelists included Hossein Eyvazlou, NDF board member, Saeed Shovalpour, Deputy Economic Advisor of the Planning and Budget Organization, Jafar Ghaderi, Parliament member, Farshid Farokhnia, CEO of Mellat Bank, Ali Rouhani, Deputy Economic Policy Advisor of the Ministry of Economy and Finance, Mohammad Ghasemi, Head of the Chamber of Commerce Research Center, Houshang Falahatian, Deputy Planning Advisor of the Ministry of Oil, and Professor Akbar Manoussi, an international economist from Canada.

The panel moderator highlighted Iran’s membership in the Shanghai Cooperation Organization, Eurasian Economic Union, and BRICS, and the NDF’s international efforts in attracting foreign investment, leveraging resources, and utilizing international experiences despite sanctions. Collaborative investments, credit lines, joint funds, and sovereign wealth fund unions are among the Fund’s strategies.

Professor Manoussi, with over fifty years of experience in Canadian academic, economic, and political arenas, stressed the importance of joining significant international economic organizations. He pointed out that while the Eurasian Economic Union, Shanghai Cooperation Organization, and BRICS play roles in global economics, the World Trade Organization (WTO) is paramount with 164 members handling about 90% of global trade. He noted that entry into the WTO requires UN Security Council approval, which has been hindered by repeated U.S. opposition and some other countries’ reluctance.

Praising Norway’s Sovereign Wealth Fund with its $1.5 trillion in assets and consistent 6% annual returns as a model, Professor Manoussi highlighted its transparent management and responsible investments, contributing to its status as the largest sovereign wealth fund globally with an average allocation of $300,000 per Norwegian.

He also emphasized the potential of South American and Caribbean markets, with nearly one billion people, advocating for increased economic relations and exports to these regions, unaffected by sanctions, and expressed hope for broader international engagement through balanced and rational countries.

On the sidelines, agreements totaling $8 billion were signed for projects in water desalination, petrochemicals, and upstream oil and gas, with the NDF contributing $4 billion.