 | |
| Industry | Sovereign wealth fund |
|---|---|
| Founded | 2011; 15 years ago (2011) |
| Headquarters | Tehran,Iran |
Key people | Mehdi Ghazanfari (CEO) |
| Total assets | $64.8 billion (June 2014)[1] $35 billionUSD (March 2012)[2] $23.8 billionUSD (December 2021) |
| Website | www.ndf.ir |
TheNational Development Fund of Iran (NDFI;Persian:صندوق توسعه ملی) isIran'ssovereign wealth fund. It was founded in 2011 to supplement theOil Stabilization Fund. NDFI is independent of thegovernment's budget.[3] Based on Article 84 of theFifth Five-year Socio-Economic Development Plan (2010–2015), the National Development Fund was established to transformoil and gas revenues to productive investment for future generation.[4] It is a member of theInternational Forum of Sovereign Wealth Funds and therefore is signed up to theSantiago Principles on best practice in managing sovereign wealth funds.[5] Withdrawing any money from this fund requiresKhamenei's permission.[6]
Accordingly, 20% ofoil income is to be transferred to the National Development Fund and this percentage increases 3% annually until the end of the Fifth Five-year Socio-Economic Development Plan. The new fund is to extend 50% of its financial facilities to private, cooperative and non-governmental sectors and 20% to promoteforeign investment (inward and outward).[7][8][9] The remaining 30% is invested (incapital markets) abroad.[3]
NDFI's reserves stood at $24.4 billion in 2011 and $35 billion in 2012.[2][10] It is foreseen that the Development Fund will reach $55 billion by March 2013 and $61 billion by March 2014.[2][11] In October 2023, the fund has US$10 billion inassets under management.[12]
The National Development Fund of Iran (NDFI) aims to turn some of the country's revenue earned by selling oil, gas, gas condensate and oil products to durable wealth, productivity, economic incentive and capital. The NDFI also aims to preserve the share of oil and gas resources and products for future.[4]
The Articles of Association of the National Development Fund of Iran, under the directives of the Leader of the Islamic Revolution and ratification of the Parliament, has been incorporated in the Fifth Development Plan Law of the Islamic Republic of Iran. According to the Articles of Association, the Managing Board is the executive pillar of the NDFI whose main responsibility is to conclude agency agreements with the banks. The NDFI has, so far, concluded several agency agreements with different banks for supporting investment in the private Sector.[3]
The National Development Fund of Iran (NDFI) was established based on Article 84 of the Fifth Economic, Social and Cultural Development Plan of the Islamic Republic of Iran. The NDFI aims to turn some of the country's petrodollars to durable wealth, productivity, economic incentive and capital and to preserve the share of oil and gas resources and products for future generations. The NDFI strategies to materialize such goals include:[3]
NDFI says it complies with theSantiago Principles; thus coordinates and aligns its actions with themacroeconomic and monetary policy of theIranian government.[3]
According to laws, 20% ofoil income is to be transferred to the National Development Fund and this percentage increase 3% annually until the end offifth Five-year Socio Economic Development Plan. The new fund is to extend 50% of its financial facilities to private, cooperative and non-governmental sectors and 20% to promoteforeign investment.[7][8][9] The remaining 30% is invested incapital markets abroad.[3]
NDFI defines overall priorities and is responsible for supervision, whileIranian banks are responsible fordue diligence andfeasibility study of eachproject/loan. NFDI will increasingly deposit its funds indomestic banks Loans are made in local (Iranian rial) orhard currency. Banks must approve the loan and they assume theprojectrisks.[3]
NDFI lends to privatedomestic companies, including government companies if state ownership is less than 20%. NDFI can also be used forforeign direct investment in Iran, if those foreign companies provide 30% of the investment needs (in-kind or capital) of any project.[3]
NDFI has inked contracts with different banks including theBank of Industry and Mine, theSepah Bank, theExports Development Bank andKeshavarzi Bank to allocate $9 billion toindustry andmine,energy,cooperatives andagriculture in 2012.[13][14] Iran also announced that it will allocate $14 billion from the NDFI tooil projects.[15] Between 2011 and 2013, the fund allocated US$21.546 billion to mining and industry (including the gas, oil and petrochemical industries), US$566 million tohousing and construction, US$233 million towater and agriculture, US$686 million totransportation and US$193 million on the export of technical services.[16]
In 2015,the Parliament ratified $300 million allocation from NDFI to theInnovation and Prosperity Fund.[17] In 2015, the NDFI has also been used to financebudget deficits which is against its primary assigned objective of being Iran's national "Nest Egg".[18]
According to the government,Iran Air will use $2.5 billion from the NDFI to finance the purchase of itsBoeing aircraft.[19]
In 2018, $10.66 billion funding has been allocated for renewing theroad transport fleet.[20]
In 2019, the government said that it had allocated $2.4 billion from NDFI towardssmall and medium enterprises.[21]
| Year | Fund inflow/i.e. money allocated to NDFI from oil/gas sales (USD billion) | Fund outflow/i.e. loans made to companies (USD billion) | Ending balance/i.e. what is left to allocate in terms of loans/investments (USD billion) |
|---|---|---|---|
| 2010 | 14.104 | -- | 14.104 |
| 2011 | 20.782 | 4.60 | 30.286 |
| 2012 | 15.084 | 11.305 | 32.436 |
| Total | 49.97 | 15.905 |
Note: Total current assets held in the NDFI is thetotal cumulated fundinflow (over years) +/- net cumulated profit/loss.
The NDFIexecutive board is elected by theboard of trustees, which seats 11 key government officials, including three ministers and is currently led by Dr.Hassan Rouhani, the president of the Islamic republic of Iran. NDFI has also asupervisory board made of theSupreme Audit Court and theGeneral Inspection Office.[3]
NDFI has five members on the board of executive directors:[citation needed]
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