Tehran, YJC. - In its recent issue, International Trade Finance (ITF), as a leading international and technical journal in the field of trade finance and credit insurance, published a piece of news about Export Guarantee Fund has tripled its capital.
Iran’s export credit agency (ECA), the Export Guarantee Fund of Iran (EGFI), has tripled its capital, from $100m to $300m. The move was announced on 6 July by Taher Shah Hamed, EGFI’s chairman and chief executive, who said that the Iranian parliament dedicated $200m in the budget law of fiscal year 2013-2014, as a capital increase for EGFI.
The parliamentary approval was made on 15 June. Mr Hamed said that the source of the increase was foreign exchange reserves placed into EGFI’s trust for backing up its bond issuance. He noted that the capital increase "could be considered as a compensation for the substantial amount of claims paid by EGFI during the last two years in order to indemnify Iranian exporters and outward investors for the loss incurred”. He added that as a result of the capital increase, "EGFI will have a better capital adequacy ratio, which in turn will boost its ability for protecting its clients, through issuing guarantees and insurance policies.”
ITF was told by Arash Shahraini, EGFI’s country risk and international cooperation director, that the major claims paid by EGFI during the last three years have stemmed from Azerbaijan, Cuba, Cote d’Ivoire, Sudan, Syria, and Tajikistan. Asked about EGFI’s cover policy on Egypt, where unrest is peaking again, he said that EGFI has suspended any new cover. "After a democratic, legal and broadly-accepted government rules the country, EGFI will start its cover for Egypt,” he said. EGFI was established in 1973, marking the first ECA created in the Middle East and North Africa (MENA) region. It is remitted to support, develop and promote Iran’s non-oil exports. In 1994, after some years of inactivity, EGFI was reorganised as a legally and financially independent entity, 100 per cent state-owned, and affiliated to Iran’s Ministry of Commerce. EGFI became an observer member of the Berne Union’s sister organisation, the Prague Club, in 1999, and received full membership status in 2001.