TEHRAN – Iran’s National Development Fund (NDF) signed a €50 million credit line agreement with Kyrgyzstan on Sunday.

As reported, the credit line will be made available through a bank selected by the exporter, enabling Iranian exporters of technical and engineering services to finance their projects in Kyrgyzstan.

The agreement was signed by Mehdi Ghazanfari, Chairman of the NDF Executive Board, and Bakyt Sydykov, Kyrgyzstan’s Minister of Economy and Commerce.

Potential doubling of the credit line

On the sidelines of the signing ceremony, Ghazanfari announced the possibility of doubling the credit line to €100 million, depending on project performance.

He recalled that nearly two years ago, the two sides signed an initial memorandum of understanding in Bishkek, under which €50 million in financing was earmarked for buyers of Iranian technical and engineering services.

He added that Kyrgyz authorities were expected to identify low-risk, high-return projects and propose them for implementation by Iranian companies.

"This investment has two main benefits; on the one hand, it contributes to Kyrgyzstan's economic growth through the implementation of construction projects, and on the other hand, it activates the production chain in Iran, as Iranian contractors will be required to use Iranian goods and equipment", the official reiterated.

Ghazanfari said that during Sunday's meeting, the two sides agreed to re-establish a joint investment committee to oversee the projects.

Referring to the need for high quality projects, he added: "The quality of project implementation is very important for the National Development Fund. We are seeking to create a mechanism where real representatives of the Iranian private sector, who prioritize national interests, are present in the joint committee so that the interests of the two countries are properly protected."

Ghazanfari stated that the goal is to fully absorb the first 50 million euros by 2025, and if successful, the second 50 million euros will also be allocated, adding: "Exporting technical and engineering services will not only generate foreign currency for the country, but will also develop factories and create jobs."

In response to some concerns about investing the fund's resources abroad, the official said: "These foreign currency resources return to the country along with the profits, and this process not only does not harm domestic needs, but also strengthens domestic production by developing the export of technical and engineering services."

This deal paves way for bilateral economic, technical co-op

During the ceremony, Minister Sydykov said: "Kyrgyzstan and Iran have always had strong relations, and this deal will pave the way for the development of bilateral economic and technical cooperation."

Emphasizing the importance of this deal, he said: "We in our team are adopting the best working methods to attract investment. The demand for infrastructure projects in Kyrgyzstan is very high, and this joint cooperation with Iran will open a new chapter in the economic relations of the two countries."

He emphasized the strong and expanding economic ties between the two countries, noting that current cooperation remains far below their potential. The minister said the new memorandum would bolster investment, highlighting Kyrgyzstan's steady economic growth over the past three years, controlled public debt, and an inflation rate between five and seven percent. He also pointed to ongoing economic reforms and currency stability in Kyrgyzstan.

The official thanked the NDF for organizing the meeting and announced that a follow-up session to sign an additional cooperation document would be held the next day. He noted that Kyrgyzstan already has successful infrastructure cooperation with the NDF and that development funds from countries like Russia are active in Kyrgyzstan at low interest rates. Project risks, he said, are managed under the supervision of a national committee.

Ghazanfari welcomed reports of Kyrgyzstan’s strong economic growth, calling it a sign of effective policymaking, particularly in the economic sector.

He stressed the importance of informing Iranian technical and engineering companies about the business environment in Kyrgyzstan, where knowledge gaps persist among the Iranian private sector.

Regarding the terms of the memorandum, Ghazanfari explained that Iranian companies would submit their contracts to the NDF to access financing. The funds would be disbursed through Iranian banks directly to the contractors, meaning the NDF would not operate inside Kyrgyzstan; instead, Iranian private firms would enter the Kyrgyz market with NDF backing.

He concluded by stating that if Iranian contractors perform well in Kyrgyzstan, the credit line could be doubled, reaching a total of $100 million.

EF/MA

Photo: NDF Head Mehdi Ghazanfari (L) and Kyrgyzstan’s Minister of Economy and Commerce Bakyt Sydykov