Iran asks Venezuela to repay debts exceeding USD 290 million

Iranian President Mahmoud Ahmadinejad may have visited Latin America to lead people to believe that he has allies in the region, but he also seized the opportunity of his visit to Venezuela to demand the payment of a USD 298 million debt that the Venezuelan government has contracted with state-run Iranian companies.

Venezuela has debts with Iranian firms in the areas of automotive industry, construction, and housing, which are three of the main pillars of the relationship between Caracas and Tehran.

"Ahmadinejad's delegation wanted to talk about the debts that the Venezuelan government has contracted with five Iranian corporations operating in Venezuela, whose activities have been hampered by a series of obstacles," sources close to those businesses told El Universal.

First, Venezuela owes USD 98 million to Iranian state-run company Ehdasse Sanat. Repayment of this debt has already been approved by the National Assembly. The representatives of the company are seeking repayment of the debt to meet their commitments, including bank loans.

Ehdasse Sanat was awarded a USD 198 million contract signed in 2005 for the construction of the Cerro Azul cement plant located in El Pinto, in the northeastern state of Monagas. The plant was scheduled to start operations in 2008, but it is actually going to start operations in March 2012.

Company executives told officials of the Venezuelan Ministry of Science, Technology, and Intermediate Industries (MCTI) that Ehdasse was willing to build a second production line in the cement plant, as well as other lines. "We have good intentions but Venezuela has not responded," the source said.

Meanwhile, Iranian companies Khodro Industrial Group (Iran Khodro) and Saipa, two of the largest Iranian automotive industries, have requested the payment of a USD 120 million debt.

Other Iranian companies facing financial problems due to Venezuelan debts are leading construction companies Kayson and Iranian Housing Company. Venezuela owes them USD 80 million.

Both companies are dedicated exclusively to the construction of housing complexes and industrial construction.

Translated by Gerardo Cárdenas