In the name of God

Iran’s Petrochemical Financing Challenges Ahead Tehran, 22 April, 2017

Rich Raw Material Crude Oil Reserves 157 Billion barrels 10% of world's total reserves 4th in the world Natural Gas Reserves 37 Trillion cubic meters 18% of world's total reserves 1st in the world

Petrochemicals at Stock Market Attractive industries P/E Share of Total Market % Petrochemical 4-5 25

Petrochemicals Current capacity : 60 million tons/ year Next 10 years plan target : 130 million tons/ year Production (2016): 51 million tons

Financing package is required Main Challenge The Main Challenge: Over 30 Billion Euros Financing package is required Within next 5 years

Bank of Industry & Mine BIM: Development Bank 60 years of successful experience 1.6 Billion Euros Paid Capital 11 Billion Euros Asset 1100 Human Capital

Sample of Financed Projects by BIM Steel Mill Actual production (2016): 17 Million tons Iran’s Global Rank 14th New Capacities Financed : 8.5 Million by BIM during past 4 years tons/year Financing Volume: 2.1 Billion Euro Yazd, Neyriz, Baft, Shadgan, Ghaenat, Sepid Dasht, Mianeh, Sabzevar, Dezful, Bandar Abbas , Azna

Sample of Financed Projects by BIM Energy Projects Power Plants 3000 MW (6 x 500 MW plants) 1.6 Billion Euro Golestan, Behbahan, Kahnooj, Sirjan, Yazd, Noshahr 2 x 10 MW Solar Farm Yazd, Zahedan 400 MW (38 CHPs) 200 Million Euro

Sample of Financed Projects by BIM Infrastructure The 1st Fast Train Tehran – Isfahan 1.6 Billion Euro 2nd Fast Train Tehran – Mashhad* 2 Billion Euro Expansion and Modernization of Ports Bandar Imam, Bandar Abbas, Jaask, Chabahar, Amir Abad Ship Building & Oil Rigs *Under Study

Sample of Financed Projects by BIM Aviation Projects Aircraft Engines’ overhaul The New Airbuses Expansions of Imam Khomeini Airport * Further Expansion of Aviation Fleets* * Under Study

Sample of Financed Projects by BIM Petrochemical Kavian Petrochemical Plant 480 Million Euro Ethylene Ilam Petrochemical Plant Expantion 220 Million Euro Ethylene - HDPE Lorestan Petrochemical Plant 220 Million Euro HDPE Mahabad Petrochemical Plant 220 Million Euro LDPE MS Petrochemical Plant 510 Million Euro Urea – Ammonia

Sample of Financed Projects by BIM Oil, Gas & Petrochemicals Lavan Development 220 Million Euro Methanol & Ammonia Oil & Gas Upstream 1000 Million Euro Crude Oil & Gas Bushehr Petrochemical Plant* 2300 Million Euro Methanol – Ethylene – HDPE - EG PG Bidboland Gas Refinary* 2000 Million Euro Ethan – propane – Butane – Liquid Gas * Syndicate Member

Subsidiaries BIM Investment Company BIM Brokerage Company BIM Exchange Company BIM Leasing Company Atye-Damavand Investment Company Iran Chemical Industries Investment Company (ICIIC)

Europäisch - Iranische Handelsbank AG Subsidiaries Europäisch - Iranische Handelsbank AG EIH based in Hamburg

Challenges Fund raising & Financing is the most critical Challenge We should have a Plan and a Tailor Made Solution for it

Financing Resources NDF (National Development Fund) Government Budget Allocations Diversified Financial Tools Islamic Banking Sukuk Convertible Bonds IPO

Financing Resources International Financial Institutions JVs and Mutual Funds Leasing Companies Investment Houses FDIs

Iran : Almost a Debt Free Country Iran’s Foreign Debt Iran : Almost a Debt Free Country

Challenges Country/Companies Risk Rating : Risk Portfolio : Political, Legal, Reputational Market, Pricing, Competition Technology, HR Inflation, Exchange rate Credit, Liquidity & Operational Risk

Risk Mitigation Growing Market Safe & Secure Environment Euro Based Transactions Unified Exchange Rate Ahead (Single Currency) Overcoming lack of Professional Expertise

ECAs Coverage

6 BB- 7 B Sovereign Rating Most Probably 5 in 2017 Q1 Stable Economic Outlook

Challenges Reintegration to Global Banking Community Updating Iranian Banking Compliance Policies And : Snap Back

Solutions to Challenges Solutions & Strategies : Building a long-term Sovereign yield curve & Rating Developing a liquid primary and secondary government bond market, reducing refinancing risk Developing a sound regulatory framework for structured instruments (securitization, leasing, factoring derivatives) Urging foreign Banks to join Iranians’ for Co-Financing

Solutions to Challenges Solutions & Strategies : Trying to have an Updated Regulated Banking System Basel III, Corporate Governance, Compliance AML/CFT, FATCA, FATF Projects of national interest, with stable cash flows Adequate protection for concluded contracts during sanction relief is available

No Risk Guaranteed Market : The applicable Currency: Euro Risk Mitigation Guaranteed Market : Oil, Gas & Petrochemicals Global Off Takers are available Unified Exchange Rate is ahead Moving towards Commitment changing IRR to Euro The applicable Currency: Euro No USD Involvement No Risk

Solutions to Challenges FATF Update 21 October 2016 Applying Due Diligence to business relationships and transactions with natural and legal persons from Iran. 24 June 2016 The FATF has suspended counter-measures against Iran for a period of 12 months

The Government Policies Creating an Excellent Political & Economical Relation with Global Community Providing Secure, Stable & Sustainable Business Climate Urging The Banks to Meet all New Regulatory and Compliance Issues Initiating an Efficient Environmental Policy & Measure Moving Towards more Free & lean Economy i.e. Less Price Control by Government

We just need to be better at working together What Next? We just need to be better at working together Hoping to see the serious break in the clouds, having better time ahead to strengthen ties with the world

Many Thanks AAAfkhami, 22 Apr, 2017, Tehran cmd@bim.ir