Long-term Finance


تامین مالی بلند مدت

Extending loans out of National Development Fund resources (On-lending)

Given the basic nature of MEB, as a bank focused on serving legal persons and regarding its special attention to industrialists and manufacturers across the country, the Middle East Bank always places special importance on meeting the financial needs of industrial and manufacturing units. In the same line, MEB, through concluding agency and/or depository agreements with the National Development Fund (NDF), on-lends NDF funds and extends loans in national or foreign currencies (Rial) in order to finance a portion of investment expenses of new and expansion (greenfield and brownfield) projects of private, cooperative and non-government public sectors.

The general features of such financings are as followings:

NDF loans in foreign exchange

The qualified projects and activities to receive the loan

  • Oil, gas, petrochemical and refinery projects and activities
  • The projects and activities which can repay in foreign currency, the principal and service the interest of the loan, using the foreign exchange revenues generated through their exports,
  • Manufacturing of various types of motor vehicles, in line with the renovation of the worn-out inter/intra-city commercial fleet vehicles, provided that the government of the Islamic Republic of Iran (ministry of petroleum) guarantees repayment of loan instalments (principal and interest) in foreign currency
  • Railway transportation projects and activities, provided that the installment loans are repaid in foreign exchange (principal and interest)
  • Power plants and desalination plants projects and activities, provided that the loan instalments are repaid in foreign exchange (principal and interest)
Persons eligible to enjoy loans
  • Loans out of NDF resources (on lending facility) can be extended to companies and enterprises which not less than eighty percent (80%) of whose stocks or partners' shares belong, directly or through legal persons, to individual persons
  • Extending loans by the agent bank, out of NDF funds, to economic enterprises, which more than twenty percent (20%) of their board members, irrespective of ownership type, are appointed by the government officials is prohibited,
  • The companies and enterprises, the absolute majority of whose shares belong to public-interest entities, such as endowments (waqf), insurance companies, pension funds and public charity foundations, are deemed to be the same as companies and enterprises belonging to non-government public entities. So, granting loans to such entities and their affiliated and associated companies, up to twenty percent (20%) of NDF funds is allowed,
  • Enterprises and companies which do business in partnership with foreign investors,
  • The foreigners who buy Iranian goods and services in export target markets,
  • Exporters of technical and engineering services ( if submit approval of the "Committee of Article (19) on the Implementing Regulations concerning Government's protection of Technical and Engineering Services")
General Terms and Conditions on Receiving Loans
  • Granting loan to authorized legal persons, provided that the ratio of shareholders' equity to total assets of the company (Equity to Asset ratio) at the time of submitting the request to the agent bank and at any other phase (during loan period) does not fall below twenty percent (20%). (the upstream oil and gas projects and activities guaranteed by the Iran National Petroleum Company or Iran National Gas Company and projects for manufacturing various types of motor vehicles, in line with renovation of the worn-out inter/intra-city commercial fleet vehicles and the Khaleej-e- Fars (Persian Gulf) refinery are excluded from the application of this regulation.
  • The internal rate of return (IRR) of production and investment projects in water and agriculture sectors should be a minimum of ten percent (10%) and for other sectors a minimum of fifteen percent (15%),
  • The interest rate for foreign currency loans for oil, gas and petrochemical sectors is set at six percent (6%) per annum and three and a half percent (3/5%) per annum for other sectors,
  • The period time, since project implementation till trial operation, is a maximum of three (3) years, grace period maximum of six (6) months and loan repayment period maximum of five (5) years. In any case, the total period, including implementation, grace and repayment periods shall not exceed eight (8) years,
  • The loans are extended solely in foreign currency and the recipient of the loan is not allowed to convert the foreign currency into Rial in the internal market,
  • The loans, out of NDF funds in foreign currency, extended (on-lended) to any project, may at most cover the foreign currency needs of the investment expenses of the project,
  • Issuance of internal letter of credit or any other payment instrument which may result in payment of foreign currency inside the country is prohibited,
  • The currency conversion risk shall be borne by the recipient and the customer is required to make repayments in foreign currency,
  • The provisions of the Law on Maximum Use of Internal Production and Service Capability and Protection of Iranian Goods, ratified on 15/ 02/ 1398, (04 May, 2019) is mandatory.
NDF Loans in Rial (National Currency)

qualified projects and activities for receiving loan

  • Industry and Mine
  • Working capital for manufacturing projects and activities,
  • Export-oriented projects and activities
  • New and expansion ( green/brownfield) projects,
  • Investment projects for the creation and development of railway transportation infrastructures.
  • Tourism
  • Construction and equipping Hotel, residential centers and welfare complexes and roadside welfare services complexes,
  • Water, Agriculture, Environment and Natural Resources
  • Working capital for production projects and activities,
  • Export of agricultural products
  • Establishment of greenhouses and production of greenhouse products
  • Fishery subsector projects and activities including marine fish cage culture, warm water and cold water fish farming, Caviar farming, shrimp farming and fishing equipment,
  • Projects and activities in processing and supplementary agro-industries
  • Increasing productivity in water consumption through the employment of new irrigation techniques and up-to-date technologies as well as water supply, treatment and transfer projects,
  • Mechanized agriculture services,
  • Environmental and natural resources projects,
  • New and expansion projects of livestock production units with the priority given to expansion projects,
  • New, expansion and complementary projects concerning the red meat, white meat and milk production chains, with the priority given to expansion projects,
  • Renovation of livestock, poultry farming and aquaculture units which are within the supply chain,
  • Cultivation of medical plants

Eligible persons to get loans

  • Loans out of NDF resources (on lending facility) can be extended to companies and enterprises which not less than eighty percent (80%) of whose stocks or partners' shares belong, directly or through legal persons, to individual persons,
  • Extending loans by the agent bank, out of NDF funds, to economic enterprises, which more than twenty percent (20%) of their board members, irrespective of ownership type, are appointed by the government officials is prohibited,
  • The companies and enterprises, the absolute majority of whose shares belong to public-interest entities, such as endowments (waqf), insurance companies, pension funds and public charity foundations, are deemed to be the same as companies and enterprises belonging to non-government public entities. So, granting loans to such entities and their affiliated and associated companies, up to twenty percent (20%) of NDF funds is allowed,
  • Enterprises and companies which do business in partnership with foreign investors.

General Terms and Conditions on Receiving Loans

  • Granting loan to authorized legal persons, provided that the ratio of shareholders' equity to the total assets of the company (Equity to Asset ratio) at the time of applying to the agent bank and at any other phase (during loan period) does not fall below twenty percent (20%)
  • The internal rate of return (IRR) of investment and production projects in water and agriculture sectors, processing and supplementary industries, natural resources, environment and tourism sectors is set at a minimum of sixteen percent (16%), and for the industry and mine sector at a minimum of twenty one percent (21%).
  • Rate of interest of Rial loans ( when the Rial resources of NDF are deposited with the Bank) is set at fourteen percent (14%) for projects in water and agriculture sectors, natural resources, environment and tourism. For industry and mine it is sixteen percent (16%) and for export of industrial and agricultural products eleven percent (11%). Deprived areas and knowledge-based companies enjoy a four percent (4%) discount on the above rates.
  • The period time project implementation till trial operation is a maximum of three (3) years, grace period maximum six (6) months and repayment period maximum five (5) years. In any case, the total period, including implementation, grace and repayment periods shall not exceed eight (8) years.