According to the public relations office of the National Development Fund, Mahdi Ghazanfari expressed his pleasure during a meeting with Paul Beuer Nystad, the Norwegian ambassador to Iran. He stated that he was glad to have the opportunity to discuss the shared experiences in the realm of national wealth funds between Iran and Norway. "The Norwegian sovereign wealth fund is regarded as a model for all wealth funds globally," he added. "Many of the principles governing national wealth funds worldwide, known as the Santiago Principles, are likely derived from the experiences of the Norwegian fund, which can be considered the progenitor of wealth funds around the world."
Mahdi Ghazanfari stated that the National Development Fund currently manages approximately $170 billion and aims to expand its resources to reach between $200 billion and $250 billion. Previously, the fund's initiatives were primarily focused on the energy sector and providing loans. However, with a recent shift in governance and strategy, we are now moving towards participating in investments. This represents a new experience for us, and given that the Norwegian Sovereign Wealth Fund has valuable insights in this area, we hope to leverage those experiences.
Two Proposals from Head of Iran's NDF for the Norwegians
Mahdi Ghazanfari added that, given the extensive experience of Norway's Sovereign Wealth Fund in successful investments, he has two proposals to enhance collaboration between the two funds. The first suggestion is for experts from both the Iranian and Norwegian funds to engage in joint meetings to share their experiences. This initiative could gain more substance and formality through a visit from the head of Norway's Sovereign Wealth Fund to Tehran, thereby paving the way for the development of relations and joint investment activities in industrial and commercial sectors.
The head of the National Development Fund emphasized that both Iran and Norway are among the largest holders of oil and gas reserves globally. He noted the significant investments made in renewable energy, which should also be pursued by our country. He stated that the unjust sanctions imposed by the United States have transformed Iran into a land of investment opportunities. Therefore, he proposed inviting the Norwegian Sovereign Wealth Fund and Norwegian investors to explore these investment opportunities in Iran.
Mahdi Ghazanfari emphasized that these projects could range from one billion to thirty billion dollars, and the National Development Fund is eager to invest and collaborate alongside the Norwegian Sovereign Wealth Fund in these initiatives. Additionally, the National Development Fund can provide guarantees for this investment, ensuring the return on investment and mitigating the risks for the Norwegian side.
The Scope of Norway's Investments in Iran Not Limited Solely to Oil & Gas
In response to the Norwegian ambassador's question, the head of the National Development Fund clarified that the investments made by Norway's Sovereign Wealth Fund in Iran extend beyond just the oil and gas sectors. He pointed out that the Iranian government is focused on diversifying foreign investments and creating opportunities across various sectors. Due to the significant capital required for major projects such as those in oil and gas, banks, alongside the National Development Fund, are working to meet the private sector's demands in these areas. As a result, the National Development Fund plays a crucial role in financing large-scale projects. Furthermore, our neighboring countries are investing in shared resources, and we are also striving to claim our share of these valuable assets.
Eight Areas of Business for Collaborative Investment Opportunities between Iran and Norway
Mahdi Ghazanfari has announced that the National Development Fund has commenced activities in the field of artificial intelligence and emerging technologies. He outlined the sectors for investment by the National Development Fund as follows:
First, the oil and gas sector; Second, electricity generation through renewable energy sources; Third, artificial intelligence and emerging technologies; Fourth, pharmaceuticals based on innovative methods; Fifth, automotive and logistics industries; Sixth, petrochemicals; Seventh, mining industries such as steel and copper; and eighth, industrial groups including household appliances and food products.
The head of the National Development Fund emphasized that if the Norwegian Sovereign Wealth Fund expresses interest in investing in Iran, a joint fund could be established as a subsidiary of both the National Development Fund and the Norwegian Sovereign Wealth Fund. Additionally, a committee comprising experts from both funds would be formed to determine the areas for investment. This collaboration has the potential to expand in the future with the involvement of sovereign funds from other developed countries.
Iran, Land of Sunlight and Abundant Solar Energy Opportunities
Mahdi Ghazanfari, the head of the National Development Fund, highlighted Iran's natural capacities in the field of renewable energy, stating that the majority of investments in Iran's renewable power plants have been directed towards solar energy. He emphasized the vast potential of the country, noting that Iran's extensive land in the central region allows for the establishment of hundreds of large solar farms, which could play a significant role in ensuring sustainable energy supply. Additionally, the head of the National Development Fund mentioned the fund's plans to expand investments in other energy sectors and expressed Iran's readiness to collaborate with Norway's sovereign wealth fund on two 10,000-megawatt energy supply projects, considering this partnership a significant step towards the country's sustainable development.
Norway's Sovereign Wealth Fund with Total Wealth of $1.7 Trillion
In the course of this meeting, the Norwegian ambassador to Iran remarked that the Norwegian Sovereign Wealth Fund obtains its resources from the oil and gas industry, taxation, and returns on investments in foreign enterprises. He pointed out that the fund is restricted to investing solely in international projects. Paul Beuer Nystad mentioned that the fund currently has assets totaling $1.7 trillion, with 9,000 companies globally utilizing its resources. Furthermore, the fund can track and observe its investment levels and shareholdings in these companies instantaneously through an online platform.
The Norwegian ambassador stated that the investment from the Norwegian fund is conducted solely through the acquisition of shares in these companies. The majority of the fund's revenue is derived from the oil and gas sector, and these resources are invested in 9,000 companies worldwide to ensure a suitably diversified investment portfolio. Regarding the selection of members and the management of the fund, the ambassador noted that the Norwegian National Wealth Fund is managed by the Central Bank of Norway. According to the budget approved by the Norwegian Parliament, the government is permitted to utilize only 3 percent of the annual returns from the fund's resources to address budget deficits. Fortunately, due to the fund's substantial resources, this 3 percent covers 25 percent of government expenses.
The Ukraine Crisis Yields Norway $150 billion Profit
The Norwegian ambassador stated that the country generates an average annual oil revenue of $40 billion. However, in recent years, due to the crisis in Ukraine, Europe has shifted from importing gas from Russia to purchasing it from Norway, resulting in a revenue increase to $150 billion for Norway. This situation has proven to be beneficial for Norway, albeit only in the short term.
The Norwegian ambassador stated that Iran occasionally experiences gas shortages, which can adversely affect electricity production. Norway possesses substantial gas reserves, and there exists the potential for a mutually beneficial agreement in this regard. Undoubtedly, in the absence of sanctions, Norway and Iran could have established a fruitful collaboration in the trade of gas condensates, thereby addressing Iran's gas and electricity shortages.
The ambassador further noted that it is crucial for the Norwegian Sovereign Wealth Fund to invest in areas with a low risk of capital return. The fund's investments in companies are conducted through equity purchases, and the optimal approach is to become a partner in each company by acquiring shares.
Norway's Eagerness to Invest in Iran Presents New Opportunities for Collaborative Efforts
Paul Beuer Nystad, the Norwegian ambassador to Iran, announced Norway's interest in pursuing investments in the country. Expressing his satisfaction with the meeting, he stated, "I believe we have new options and opportunities ahead of us, and we are very eager to develop these interactions through ongoing discussions." Beuer Nystad emphasized the importance of understanding the challenges and opportunities associated with investing in Iran, adding, "Iran has clearly outlined valuable investment prospects. We hope that, in collaboration with the Ministry of Foreign Affairs and other relevant entities, we can pave the way for joint activities and elevate this cooperation to a new level of economic interactions."