What is the status of the World Bank Group Program in Iran?
International Bank for Reconstruction and Development (IBRD) financial assistance consists of three* loans to Iran for projects designed to help Iran's poorest people and to meet basic humanitarian needs. The three ongoing projects help improve access to water and sanitation, support the upgrading of housing in the poorest urban areas, and support better land and water management in poor rural areas. Funding for these loans is raised on the capital markets.
These projects were approved between 2004 and 2005 by the Board of Executive Directors of the World Bank, which represents 186 member countries.
It is estimated that undisbursed funds for IBRD projects in Iran will be approximately US$258 million as of October 1, 2009.**
The IFC program in Iran is focused on helping small businesses create jobs and spur economic growth. IFC's current portfolio in Iran is US$13.42 million in two projects, committed in 2004 and 2005, supporting small and medium businesses.
Does the World Bank Group follow UN sanctions on Iran?
Yes. As an independent United Nations specialized agency and a multilateral development bank, the World Bank Group fully complies with UN sanctions on Iran* and reviews payments and contracts under World Bank Group financed projects to ensure that no loan funds are used for financing of goods prohibited by the UN sanctions or payments to designated entities and individuals.
Security Council resolution 1737 (March 2007) on Iran, while calling on member states and international organizations to refrain from making new financing available to Iran, exempts humanitarian and development activities conducted by international financial institutions from this prohibition. Nonetheless, no new loans to Iran have been approved since 2005. (* Note: UN Sanctions on Iran were passed in December 2006, and expanded in March 2007 and March 2008.)
What is the Multilateral Investment Guarantee Agency's (MIGA) involvement in Iran?
The World Bank Group has no plans to approve any new loans to Iran.
In 2005, the Multilateral Investment Guarantee Agency (MIGA) provided US $127 million in guarantees for two projects. No MIGA funding has been disbursed to Iran. MIGA guarantees provide political risk insurance for foreign investment.
MIGA does not provide or infuse cash. It is the insured party—the foreign company—that pays MIGA a premium for the guarantee, and it is to the insured party that MIGA would make payment in the event of a valid claim.
* As of October 1, 2009, there will be three loans in the Iran portfolio (one of the four ongoing projects); Ahwaz and Shiraz Water and Sanitation Project will close on September 30, 2009. ** This figure does not include the undisbursed amounts for the Ahwaz and Shiraz Water and Sanitation Project, which is closing on September 30, 2009.
