Export Guarantee Fund of Iran (EGFI) is ready to back short-term credits to Ethiopian buyers prepared to open letters of credit (L/Cs) to fund purchases of Iranian goods.

A senior member of Iran's High Export Council, Norouz Kohzadi, made the announcement in a report outlining plans to boost commercial links between the two countries.

L/C requirements

"EGFI is prepared to extend short-term credits to Ethiopia up to a ceiling of US$5 million," according to Kohzadi.

"Ethiopian clients should open L/Cs with specific validity date at the Ethiopian Commercial Bank to take advantage of the credit," he adds.

EGFI's risk

Kohzadi, who is chairman and managing director of EGFI, says that the risk of the failure to reimburse the L/Cs on due date has been insured by EGFI.

"Thus the Iranian banks are authorised to accept L/Cs as a guarantee to extend export facilities to exporters from their foreign currency reserves, without concern over being reimbursed in due time," he concluded.

Export support

The report released by EGFI public relations department quoted Kohzadi as saying that the third meeting of Iran-Ethiopia Economic Commission will be held shortly.

Founded in 1973, EGFI re-started operations in 1993 with the aim of non-oil export promotion by guaranteeing the Iranian exports. Its role is to share the commercial as well as the political risks with Iran's exporters or investors in foreign projects.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.