Iran and Egypt agree to revive joint bank after a decade

Iran and Egypt agree to revive joint bank after a decade
Egyptian Economy Minister Mohammad Maait (left) and his Iranian counterpart Seyed Ehsan Khandouzi (right). / bne IntelliNews
By bne IntelliNews September 25, 2023

Iran's Minister of Economic Affairs and Finance, Seyed Ehsan Khandouzi, met with his Egyptian counterpart, Mohammad Maait, following a decade-long hiatus, and announced the formation of a joint committee to oversee collaborative projects, including the revival of Misr Iran Development Bank, IRNA reported on September 25.

Khandouzi, who travelled to Egypt to attend the Asian Infrastructure Bank meeting, discussed with Maait the evolving bilateral ties, particularly focusing on trade and economic relations between the two nations.

The meeting underscored the Iranian government's commitment to enhancing relations with neighbouring countries and the region. Both nations recognised the vast potential in their historic ties, expressing readiness to collaborate in areas such as the Asian Infrastructure Bank, the Islamic Development Bank, a joint Egypt-Iran bank, textile companies, shipping, pharmaceutical technology transfer, and medical equipment.

Maait, emphasised his country's eagerness to implement the proposals put forth by Iran, saying, "Egypt values its relationship with the Islamic Republic of Iran and hopes to see a swift enhancement in bilateral ties."

Following the meeting, Khandouzi shared on his social media, "Had a constructive discussion with my Egyptian counterpart and agreed on forming a committee for joint projects."

He added, "The capital of the Misr Iran Development Bank will also increase soon. I hope this meeting, after many years and their warm reception, will rejuvenate our collaborations and aid our economic diplomacy."

It's noteworthy that this is the first meeting between the finance ministers of Iran and Egypt in a decade.

Khandouzi arrived in Cairo, Egypt's capital, on September 24, at the head of a delegation. His will attend the annual meeting of the Asian Infrastructure Investment Bank's finance ministers and hold bilateral talks, especially with Egypt.

MIDB was founded in 1975 by the Shah of Iran, four years before Iran's Islamic Revolution, and has somehow survived despite relations between the two stopping following the establishment of the Islamic Republic.

Iran’s last Shah, Mohammad Reza Pahlavi, was buried in Cairo in 1980 following his exile after the revolution. Then President Anwar Saadat was the only world leader willing the host the dying king in a local hospital until his death.

Today, the MIDB has been accused by Israel of having become a vehicle for Iran to circumvent economic sanctions with extensive help from Egypt, one of America's closest allies in the region.

Egypt controls 59.86% of MIDB, split evenly between the state-owned National Investment Bank and Misr Insurance Company, which is partially owned by the state. Iran's 40.14% share in MIDB, worth about $80mn, is held by the Iran Foreign Investment Company. The IFIC is the investment arm of Iran's Oil Stabilisation Fund, a sovereign wealth vehicle that generates profits for the Iranian government, with investments in the Middle East, Africa, South America, and beyond.

The Asian Infrastructure Investment Bank (AIIB) is an international financial institution founded with the backing of the Chinese government. Its primary objective is to foster multilateral development and finance infrastructure projects in Asia.

Iran, a founding member and shareholder of the bank, joined in April 2015. The bank's founding members include 33 countries from the region and 17 from outside Asia.