3rd Europe-Iran Forum Presentations (Day 2)

BHB EMISSARY

ORGANIZER:!

IN CONSULTATION WITH ! LEAD SPONSOR! KNOWLEDGE PARTNERS!

SETTING THE AGENDA!FOR IRAN’S NEW ECONOMY!Zürich, Switzerland- May 3-4, 2016!

Event Presentations May 4th, 2016

3RDEUROPE-IRANFORUM

Opening Keynote!IRAN DEAL IMPLEMENTATION!Jarrett Blanc, U.S. Department of State!John Andrews, The Economist (Moderator)!

3RDEUROPE-IRANFORUM

Opening Keynote!REVITALIZATION OF IRANIAN INDUSTRY!Mehdi Karbasian, IMIDRO!Peggy Hollinger, Financial Times (Moderator)!

3RDEUROPE-IRANFORUM

Special Session 3!DENTONS: FROM DEAL TO DELIVERY!Pirouzan Parvine, Dentons Europe!Ramin Hariri, Dentons Europe!Navid Rahbar-Sato, Vozara Law Firm!John Andrews, The Economist (Moderator)!

Deal to Delivery in Iran Pirouzan Parvine, Ramin Hariri, Navid Rahbar

EU-Iran Forum, May 4, 2016

Ø Any Iranian project need a preliminary due diligence identifying legal, financial or reputational risks Ø Identify the “real” decision makers

Ø Impact of US and EU sanctions? How to cover risk of “snap back”?

Ø Do I need a license?

Ø How to protect my investment? Ø Bilateral investment treaties

Ø FIPPA

Ø Can I have 100% ownership?

Ø How can I finance my project?

Ø What are the local content requirements?

Ø How the best structure the deal (corporate and tax)?

5/3/16 2

Pre-transactional phase: Due diligence /compliance

Ø  How to prepare the next steps ? NDA, LOI, Head of Terms? A Mix of these?

§  MOU, LOI and all declarations of intent.

§  NDA and Non Circumvent : confidentiality vs business secrets

§  Head of Terms and Feasibility studies

Ø The pre-deal target you need to reach shall dictate the content of the pre-agreement you need to have agreed

5/3/16 3

Opening dialogue: From talk to deal

Ø Heads of Terms applied to M&A deals

Ø Heads of Terms applied to Industrial JVs

Ø Heads of Terms applied to Infrastructure and Energy

Ø Highlight on some specific issues Ø Legal form: Incorporated / Unincorporated

Ø Shareholders Agreement: possible in Iran ?

Ø Exit strategies: preemptive rights / put & call

Ø Termination/ Liquidation

Ø Applicable Law: the “mysterious” Swiss law

Ø Dispute resolution: international arbitration ? Other alternatives?

5/3/16 4

Negotiation of Head of Terms

Ø Iranian Petroleum Contract (IPC) main issues

Ø Focus on collaboration, transfer of technology and know-how

Ø Management structure : Joint Steering Committee (exploration) and Joint Operating Company (development and production)

Ø Participation of local partner

Ø Remuneration structure

Ø Pricing model

Ø Cost recovery

Ø Financing and reserve lending

Ø Snap back

5/3/16 5

Negotiation of Head of Terms

Thank you

Dentons Europe, AARPI 5 boulevard Malesherbes 75008 Paris France

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

© 2015 Dentons. Dentons is a global legal practice providing client services worldwide through its member firms and affiliates. This publication is not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Please see dentons.com for Legal Notices.

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Special Session 4!STRATEGIES TO SECURE FINANCING !Parviz Aghili, Middle East Bank!Ali Ashraf Afkhami, Bank of Industry and Mine !Ladane Nasseri, Bloomberg (Moderator)!

What is the likely ,meframe for the establishment of normal banking rela,onships between Iranian and major non-‐American interna,onal banks? Presenta)on by: Parviz Aghili, Managing Director of Middle East Bank Date: May 3-‐4 Zurich, Switzerland. •  Iran should not be overlooked by the world community or excluded from the global affairs! With her educated, intelligent, hardworking and diverse popula)on; its strategic loca)on, abundance of natural resources, Iran could at least marginally, contribute towards improvement of the world economy. Its contribu)on however, could be much more in beMerment of economies and poli)cs of South-‐West Asia, par)cularly the Middle East region. Considering these facts, one should ask why major interna)onal banks a r e h e s i t a n t i n e s t a b l i s h i n g r e l a ) o n s h i p w i t h I r a n i a n b a n k s .

•  I will give you my impression before I am finished. But let me start by my presenta)on with a set of data about Iran’s popula)on, its economy, and its energy resources. Then, I will talk about Iran’s banking industry and its shortcomings. And then my concluding remarks on reluctance of major interna)onal banks to start working with Iran, followed by a request from smaller banks, regional banks, those located in the neighboring countries to Iran, and those far away from Iran, to properly examine the JCPOA; hear what the authori)es in the European countries say, and even a number of US secretaries in the US Administra)on say.

•  I will give you some figures on Iran’s economic indicators, some informa)on about the banking industry, and close by giving you my view of the )meframe for involvement of interna)onal banks in facilita)ng trade with I r a n .

1) Economic Indicators GDP, External & Internal Debt, Exports – Imports & BOP Government Budget Review of World Energy

2) Banking Industry

Aggregate Balance Sheet of all banks Bad Debts of our banks and Equity Investments by banks Monetary Policies of Central Bank of Iran

3) Timeframe for Establishment of Correspondence banking Rela)onship

3.1) What Iranian Government had to do per terms of JCPOA? Nuclear items

3.2) What UN, EU and US had to do?

Libing of all UN, EU and some of the US Sanc)ons

3.3) What Iranian banking System has to do?

Strong Supervision from the Central Bank Transparency & Disclosures by banks, Implementa)on of Corporate Governance, Compliance Department (FATF, AML&CFT) Risk Management and Basel Accords II, III IFRS Accoun)ng Standards

2010 2011 2012 2013 2014 2015* Gross Domes,c Product

Constant 2004 trillion IRR 2,069 2,158 2,012 1,973 2,032 -‐ Current billion US$ (PPP) 1,274 1,350 1,283 1,277 1,352 -‐ Current billion US$ 466 578 585 477 421 -‐ Constant 2005 billion US$ 279 290 270 265 277 -‐ Growth rate 6.5% 4.3% -‐6.8% -‐1.9% 3.0% 0.7%**

Government Debt (billion US$) External debt 22.8 19.2 7.7 6.7 5.1 5.7 Internal debt (US$ equivalent IRR) -‐ -‐ -‐ -‐ 135.7

Trade (billion US$) Imports of goods 75.5 78.0 68.8 61.1 65.0 38.6 Gas and oil products 6.8 5.7 2.7 3.1 3.9 1.7 Other goods 68.7 72.3 66.1 58.0 61.1 36.9 Exports of goods (BOP Based) 112.8 145.8 97.3 93.1 86.5 50.4 Oil Exports 90.2 119.1 68.1 64.9 55.4 27.1 Non-‐Oil Exports 22.6 26.7 29.2 28.2 31.1 23.3 Net Services -‐10.0 -‐9.8 -‐7.3 -‐7.1 -‐7.0 -‐3.0 Non-‐Oil Exports (Customs Based) *** 26.6 33.8 31.9 31.2 36.5 29.8 Manufacturing 20.2 27.6 25.1 25.0 29.1 22.0 o/w Petrochemicals 11.6 15.0 10.6 10.8 14.5 NA Others 8.6 12.5 14.5 14.3 14.6 NA

Mining 1.3 1.0 1.2 1.7 1.3 0.5 Agricultural and Tradi)onal 5.1 5.2 5.6 4.5 6.1 4.2

Balance of Payments (billion US$) Current account balance 27.6 58.5 23.4 26.4 15.9 10.0 Current account balance as % of GDP 5.9 10.4 4.0 7.0 3.8 NA Capital account (net) -‐25.2 -‐16.9 -‐6.7 -‐11.5 -‐1.7 2.1 Total reserves, including gold **** 75.3 74.4 95.8 108.0 121.2 129.8 Note: 2014 refers to 3/20/2014 to 3/20/2015 (Corresponding to Iranian year 1393), etc. * First 9 months only ending 12/20/2015 ** Sta)s)cal Centre of Iran *** BOP based & Customs Based exports are different. Customs based exports include oil and gas products -‐-‐ which are included in "oil exports" data of BOP. On the other hand, these do NOT include es)mates of smuggled goods and "suitcase trade". Therefore, the two data series on non-‐oil exports are not comparable. **** Es)mates/best guesses

IRAN-‐ GDP, External & Internal Debt, Exports -‐ Imports & BOP

Government Budget -‐ Iran 3/20/2014-‐15 3/20/2015-‐16 3/20/2016-‐17 (in billion $) Actual Es,mated Planned as % Rev

Current Income Taxes 23.5 29.2 33.4 68% Others 10.0 13.4 15.8 32% Total 33.5 42.6 49.2 100% Current Expenditures Wages & Salaries 21.5 21.5 25.5 52% Subsidies 7.0 5.2 5.3 11% Social Benefits 10.3 16.3 21.6 44% Other Expenditures 10.1 14.7 12.6 26% Total 48.9 57.6 65.0 132% Net Current Posi,on (15.4) (15.0) (15.8) -‐32% Disposal of Capital Goods & Assets Sales of Oil & Associated Products 25.6 23.1 22.6 46% Others 0.7 0.9 1.5 3% Total 26.3 24.0 24.1 49% Acquisi,on of Capital Assets (Development expenditures) (14.6) (16.8) (19.8) -‐40% Net Capital Assets 11.8 7.3 4.3 9% Sales of Financial Assets Proceeds of Debt Instruments 2.0 3.6 9.1 19% Local Borrowings 0.1 0.1 0.1 0% Proceeds/Sale State-‐Owned Firms 7.6 5.8 5.3 11% Repayment of Outstanding Loans 0.3 0.3 0.1 0% Withdrawal from Na,onal Development Fund (NDF) 0.1 1.4 0.2 0% Others -‐ 0.1 0.1 0% Total 10.2 11.3 15.0 31% Purchase/Buyback of Financial Assets Repayments for Past Acquisi,ons (5.5) (2.3) (2.4) -‐5% Principal Repayment of Past debt Inst. (0.5) (0.6) (0.6) -‐1% Repayment of Past Dues (0.2) (0.3) (0.2) 0% Repayment of Foreign Debts (0.3) (0.2) (0.2) 0% Total (6.6) (3.5) (3.5) -‐7% Net Financial Assets 3.58 7.9 11.6 23% Net Cur Posi +Net Cap Ass +Net Fin Ass 0.0 0.1 0.1 0.0

Proved Reserves of Oil and Natural Gas at year end 2014 Country

Oil Natural Gas Oil Equiv. of NG Total (bil.Barrels) (trillion M3) (bil.Barrels) (bil.Barrels)

Venezuela 298.3 5.6 35.2 333.5 Saudi Arabia 267.0 8.2 51.6 318.6 Canada 172.9 2.0 12.6 185.5 Iran 157.8 34.0 213.9 371.7 Iraq 150.0 3.6 22.6 172.6 Russian Federa,on 103.2 32.6 205.1 308.3 Kuwait 101.5 1.8 11.3 112.8 United Arab Emirates 97.8 6.1 38.4 136.2 United States 48.5 9.8 61.6 110.1 Libya 48.4 1.5 9.4 57.8 Nigeria 37.1 5.1 32.1 69.2 Kazakhstan 30.0 1.5 9.4 39.4 Qatar 25.7 24.5 154.1 179.8 Turkmenistan 0.6 17.5 110.1 110.7

Total of Oil Reserves Plus Oil Equivalent of Natural Gas Reserves and Value of Total Reserves in $trillion at $/bar as stated (2014)

Country Oil Natural Gas Oil Equiv. of NG Total Value of Total Reserves (in trillion $)

(bil.Barrels) (trillion M3) (bil.Barrels) (bil.Barrels) 30 35 40 Iran 157.8 34.0 213.9 371.7 11.1 13.0 14.9 Venezuela 298.3 5.6 35.2 333.5 11.7 13.3 Saudi Arabia 267.0 8.2 51.6 318.6 11.2 12.7 Russian Federa,on 103.2 32.6 205.1 308.3 10.8 12.3 Canada 172.9 2.0 12.6 185.5 6.5 7.4 Qatar 25.7 24.5 154.1 179.8 6.3 7.2 Iraq 150.0 3.6 22.6 172.6 6.0 6.9 United Arab Emirates 97.8 6.1 38.4 136.2 4.8 5.4 Kuwait 101.5 1.8 11.3 112.8 3.9 4.5 Turkmenistan 0.6 17.5 110.1 110.7 3.9 4.4 United States 48.5 9.8 61.6 110.1 3.9 4.4 Nigeria 37.1 5.1 32.1 69.2 2.4 2.8 Libya 48.4 1.5 9.4 57.8 2.0 2.3 Kazakhstan 30.0 1.5 9.4 39.4 1.4 1.6 Note1: The sta)s)cs are reported in June 2015 by Bob Dudley, CEO of BP Note2: One billion M3 of NG = 6.29 million brls. of oil

REVIEW OF WORLD ENERGY

Aggregate Balance Sheet of All Iranian Banks and Non-‐bank Credit Ins,tu,ons as at January 20, 2016

Assets (in tril.Rials) (In bil.$) % Notes & Coins 105.7 3.5 0.6% Statutory Reserves in CBI 1,064.1 35.1 6.4% Loans & Credits to Public Sector 1,146.2 37.8 6.9% Loans & Credits to Non-‐Public Sector 6,942.9 229.2 41.5% Assets in FOREX 2,175.9 71.8 13.0% Other Assets 5,282.4 174.4 31.6%

Total Assets 16,717.2 551.8 100.0% Below the line items 2,483.5 82.0 14.9% Total 19,200.7 633.8 Liabili,es Deposits of non-‐public sector 9,195.9 303.5 55.0% Due to the Central Bank 836.9 27.6 5.0% Due to public sector En))es 293.6 9.7 1.8% Liabili)es in FOREX 1,699.4 56.1 10.2% Other Liabili)es 3,975.8 131.2 23.8% Capital A/C (Shareholders' Equity) 715.6 23.6 4.3%

Total Liabili,es 16,717.2 551.8 100.0% Below the line items 2,483.5 82.0 14.9% Total 19,200.7 633.8 Note: Official Conversion Rate of Rls./$ = 30,296

Ra,o of non-‐performing loans to total loans (percent)

2010 2011 2012 2013 2014 2015

13.8 15.1 14.7 14.1 12.1 12.2

Monetary Sta,s,cs (in trillion Rls. , End of the period)

2009/10 2010/11 2011/12* 2012/13 2013/14 2014/15 2015/16**

Monetary Base (M0-‐ Tri.Rls.)

1,013.6

1,184.9

1,311.5

1,467.8

Growth rate in M0 (%) 11.9% 19.4% 11.4% 27.6% 16.9% 10.7% 20.5%

Money (M1 -‐ in Tri.Rls.)

1,136.7

1,196.0

1,207.6

1,181.1

Growth rate in M1 (%) 14.5% 26.1% 18.3% 26.6% 5.2% 1.0% 7.4%

Liquidity (M2-‐ in Tri. Rls.)

2,361.6

3,251.6

3,906.2

5,079.8

6,395.5

7,823.8

9,493.9

Growth rate in M2 (%) 23.9% 37.7% 20.1% 30.0% 25.9% 22.3% 27.2%

Liquidity (M2-‐ in Mil.$)

Liquidity Mul,plier

Annual Infla,on Rate (CPI) 10.8% 12.4% 21.5% 30.5% 34.8% 15.6% 13.2%

Source: Central Bank of I.R. Iran Note: 2014/15 refers to 3/20/2014 to 3/20/2015 (Corresponding to Iranian year 1393), etc. * Es)mated data with expanded sta)s)cal coverage ** Period of March 20, 2015 to January 20, 2016. Growth rates in this column are calculated with respect to corresponding date of the previous year.

IRAN Steps Up

AAA,hami -‐ 4 May, 2016 -‐ Zurich-‐ Switzerland

In the name of God

§  1978 Victory of Islamic RevoluKon

§  1979 The first SancKon imposed by US

§  1980 Imposed War (8 years)

§  2006 SancKons imposed by UN

§  2012 DevaluaKon of Rial (2.5 Kmes)

§  2012 Embargo on oil imposed by EU

§  2013 Formal negoKaKons started between Iran & P5+1

§  2015 Landmark “JCPOA” agreement Signed (14th July)

Important Events

Pivotal Turning Point: 16 Jan, 2016 ImplementaKon Day

2011 2013 2014 2015

§  InflaKon (%) 28 45 15 11.9

§  Economic Growth (%) -‐2 -‐6.2 +2 1.5*

§  Unemployment (%) 12.6 13 10.5 10.2

§  Oil export (million bpd) 2.2 0.8 1.2 1.8

§  Non Oil export (billion $) 28 33 50 43

§  Import (billion $) 61 51 52 42

§  Oil price (average $) 107 105 60 36

Iran Economic Highlights

* Economic Growth forecast for 2016 as IMF : 4%

Banks (2015)

No Deposits FaciliKes % %

§  State Owned 9 67 69

§  Private 20 29 28

§  Credit Inst. 4 4

* 9 so called Investment Banks are acKve in Iran’s financial & capital market

Stock Market

2011 2013 2015 NOW

§  No of Companies : 322 317 315 315

§  Tedpix (x 000) 23 45-‐88 62 78

§  Market Cap (billion $) 80 164 106 135

2015 §  Turkey: No of companies 392 Market Cap 188 (billion $)

§  Malaysia: No of companies 892 Market Cap 382 (billion $)

Stock Market

AlracKve industries P/E Share of Total Market %

§  Petrochemical 4-‐5 25

§  Refineries 7-‐8 8

§  Banking 4-‐8 12

§  Basic Metals 5-‐10 10

§  Investment 5-‐6 9 §  Mining / AutomoKve / CommunicaKon 6/4/4

§  ConstrucKon-‐material/ PharmaceuKcal/ IT 2/1/1

§  CreaKng Hope and OpKmism to the Future

§  Increasing Demand, Thriving the Economy

§  ReconnecKng again to SWIFT, making Financial TransacKons more Efficient, Cheaper, Faster, Safer

§  ExpecKng a Significant increase on Investment & FDI

The most important Outcomes of 5+1 Deal

§  Higher oil producKon and upward Oil export from 1 mn bpd (during 2013/14/15) to 2 mn bpd in recent months

§  Improving Iran’s RaKng from B+ to BB-‐ ,stable outlook.

§  Placing Iran’s Economy on a higher & more inclusive growth trajectory.

§  Restoring access to Foreign Assets.

The most important Outcomes of 5+1 Deal

§  Exchange market : TargeKng Single currency exchange rate

§  Economic growth : ExpecKng 4% (2016), but targeKng 8%

§  Oil producKon : Will increase from 2.5 mn bpd to 4 mn bpd

§  Oil export : Will increase from 1 mn bpd to

2.5 mn bpd 10

Post SancKon PerspecKve

§  liquidity: Managing and Controlling

trend & rate

§ Recession : Gradual Exit from stagnant situaKon

§  Monetary Policy :

Post SancKon PerspecKve

•  Single Digit InflaKon rate, •  Managed QE, •  Incremental reducKon in banking Interest rate

§  Iran is the Second Largest economy in Middle East

§  Iran’s Sovereign Debt is likely to be very low

§  More Diverse Economy than Oil & Gas dependent neighbors

§  Ideal basis for business in Middle East, an interface with Europe, a Hub/Corridor to Region's Market

What Makes IRAN Special?

§  People, a Success factor: a young highly educated workforce

§  Balanced RelaKonship between Employers & Employees

§  Trying to have an Update Regulated Banking System

§  The most Secure country in the region

What Makes IRAN Special?

The Policies

§  Fostering a stronger Private Sector to be created

§  Tightening the PoliKcal & Economic relaKons with Global Community

§  Providing more Business Friendly Environment

§  Revising the Tax Regime to be more Encouraging and Transparent

The Policies

§  IniKaKng a Sound Environmental Policy & Measure

§  Moving Towards more Free & Lean Economy

§  Equipping the Customs RegulaKon and Clearance Process with an efficient Integrated Electronic System

§  Moving the Banks towards meeKng InternaKonal Standards, preparing to rejoin the global financial market.

§  ProtecKng Foreign Direct Investment (FDI) through FIPPA

Free Zones : • Kish Island • Chabahar • Qeshm Island • Anzali (Gilan)

• Jaask • Aras

Special Economic Zones : • Assaluyeh (Boushehr) • Sahlan(Tabriz) • Parand & Rey (Tehran) • Sarakhs (Khorasan) • Salafchekan (Qom) • Sirjan & Arg (Kerman) • Amirabad (Mazandaran) • Arvand (Abadan & Khoramshahr) • Bandar Imam Khomeini (Khuzestan) • Persian Gulf Mining Industry (Hormozgan)

Free Zones

A Big Picture of PotenKal OpportuniKes

Over 100 Billion $ PotenKal Market a year In Iran

Huge ReconstrucKon Projects in

Iran’s Neighboring Countries

Open To Business

Challenges

►  Country/Companies Risk RaKng :

Risk Porvolio : •  PoliKcal, Legal, ReputaKon

•  Market, CompeKKon, Supply chain

•  Technology, HR

•  InflaKon, Exchange rate

►  ECA Coverage

Challenges

►  Firms need access to Finance, on Kme

►  Updated Banking Standards : •  Basel III, Corporate Governance, Compliance

•  AML/CFT, FATCA, FATF

►  ReintegraKon to Global Banking Community

►  IniKaKve Financial Packages/SoluKons

►  Snap Back

Challenges

We always face Challenges, but

there are People like you

who are determined enough

to Meet and Cope with them

The way Forward

Bank of

Industry & Mine

At a Glance

§  BIM Founded: 1979 By merging of the followings:

•  Industrial Credit Bank (1956) •  Industrial and Mining Development Bank of Iran (1959) •  Development and Investment Bank of Iran (1973) •  Iranian Banks Investment Company (1975) •  Industrial Guarantee Fund (1960)

§  Paid Capital: $ 1 Billion

§  Employees: 1200

§  RaKng: (BB-‐) , Stable Outlook

At a Glance

§  Branches: 60

§  I & M market share: % 16

§  Total Asset * (March, 2015) $ 8.5 Billion

§ Opened LCs (2014 & 2015) $ 9.1 Billion

§ No of Completed Projects (2014 & 2015) 480

* Total Asset at 2016 will read $ 10.6 Billion

Bank of Industry & Mine is a

Development Bank Focusing on Providing

Banking Services for

Private Sector

AcKviKes

§ Project Finance § Corporate Banking § Investment Banking

§ Islamic Banking

§ DerivaKves & New Tools § Asset / Wealth Management

Subsidiaries

Europäisch -‐ Iranische Handelsbank AG

EIH based in Hamburg

BIM has recently established

a Strategic Business Unit (SBU)

to finance & serve

Entrepreneurs

for their SME Projects,

more efficiently through a customized

Empowering Package

Social Responsibility

§ Commiled to Environment ProtecKon

§ Empowering the People

§ Social JusKce Accomplishment

§ Helping People to Help Themselves

IRAN Neuroscience InsKtute (INI(

►  The Iran Neuroscience InsKtute “INI” will be a unique facility housed in a building with the same

design as Hanover InternaKonal Neuroscience InsKtute.

The “INI” is planned to be completed at 2017.

►  “INI” is financed by BIM.

Social Responsibility

Sample of Financed Projects

►  Kavian Petrochemical Plant $ 480 million Ethylene

► MS Petrochemical Plant $ 580 million urea – ammonia

►  Ilam Petrochemical Plant $ 230 million Ethylene

►  Lorestan Petrochemical Plant $ 233 million HDPE

► Mahabad Petrochemical Plant $ 230 million LDPE

►  Power Plants §  3000 MW (6 x 500 MW plants) $ 1.8 billion

►  DesalinaKon Plants §  3 x 100k M3/day Capacity $ 360 million

►  Cement, Tile, TexKle, Food & Beverage, …

►  Steel Mills : Neyriz, Baz, Shadgan, Ghaenat, Sepid Dasht, Mianeh, Sabzevar $ 1.8 billion

►  Aluminum : Hormozgan $ 350 million

►  Copper : 2 new plants

►  PharmaceuKcal & CosmeKcs : several projects with potenKal market value $ 8 billion

§  The 1st Fast Train Tehran – Isfahan $ 1.8 billion

§  2nd Fast Train Tehran – Mashhad* $ 2 billion

§  Expansions of Imam Khomeini Airport 25 million passengers/ year *

§  Expansion of AviaKon Fleet*

§  2 x 10 MW Solar Farm : Yazd, Zahedan

* In process of Financing by BIM

Financing Resources

►  NDFI (NaKonal Development Fund of Iran)

► Managed Fund AllocaKon

►  Diversified Financial Tools §  Sukuk

§  ConverKble Bonds §  IPO

Financing Resources

►  Corporate Deposits

►  InternaKonal Financial Market

►  Credit Lines

► Mutual Funds

►  FDI

We just need to be beler at working together

Many Thanks

AAA,hami -‐ 4 May, 2016 -‐ Zurich -‐ Switzerland cmd@bim.ir

3RDEUROPE-IRANFORUM

Panel Discussion 4!THE FUTURE OF IRAN’S “MOTHER INDUSTRIES”!Bahram Sobhani, Mobarakeh Steel!Alireza Ghaffoori, NICICO!Reza Ashraf Semnani, MIDHCO!Peggy Hollinger, Financial Times (Moderator)!

Iran Steel Industries Mobarakeh Steel Co.

By: Bahram Sobhani

CEO, Mobarakeh Steel Company

Chairman, Iranian Steel Producers Association

( Zurich - May, 2016)

Source: Worldsteel

World Crude Steel Production (m.Tons)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

1348 1343

1537 1560

1649 1670 1623

WORLD STEEL Rankings 2015

1- China 804 million tones (50%)

2- Japan 105 m.tones (6.5%)

3-India 90 m.tones (5.5%)

4- USA 79 m.tones (4.9%)

5- Russia 71 m.tones (4.4%)

6- South Korea 70 m.tones (4.4%)

7- Germany 43 m.tones (2.6%)

8- Brazil 33 million tones (2%)

9- Turkey 31.5 m.tones (2%)

10- Ukraine 23 m.tones (1.4%)

11- Italy 22 m.tones (1.4%)

12- Taiwan 21.5 m.tones (1.4%)

13- Mexico 18.3 m.tones (1.2%)

14- Iran 16.1 m.tones (1%) 15- France 15 m.tones (0.9%)

16- Spain 14.9 m.tones (0.9%)

17-Canada 12.5 m.tones (0.77%)

18- United Kingdom 11 m.tones

19- Poland 9 m.tones

20- Austria 7.7 m.tones

Total World Production in 2015:

1623 million Tons

Source: World steel

20 20 20 19

16 17 17

15 15 14 14

13 13 12

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f

Forecast for Iran Steel Industry Position by2020

Iran is the largest crude Steel Producer in MENA region

Source: World steel

Saudi Arabia; 15

Iran; 38.9

Other Middle East; 12

Egypt; 13.3

South Africa; 18.3

Other Africa; 2.2

Crude steel production share of Iran in MENA 2015 )%(

Source: World steel in figures 2015

Steel production technologies

DR/EAF [VALUE]

BF/BOF 17%

BF/BOF

DR/EAF

6 Source: World steel

Iran 2015 World 2015

Market share of steel business in Iran

Domestic Sale

12 m.tons

Export 4

m.tons 25%

Iran 2015

Domestic Sale 65%

Export 35%

MSC 2015

2007 2008 2009 2010 2011 2012 2013 2014 2015

11.5 11.7

3.6 4.3 4.5

1.5 0.8

1.3 1 1.2 1.5

Import Export

Iran Import/Export of Steel 2007-2015 (Million Ton)

Source: irica.gov.ir

MSC’s Group Export Share 2015 : 51%

Iran advantages in developing iron and steel industries

1 - Rich Iron Ore mines

30-40 5%

40-50 18%

50 -55 total Fe 69%

55-60Total Fe 8%

Iron Ore reserves based on average Fe content

2 - Rich Natural gas reserves : First in the world with 34 trillion cube meter

3 – Appropriate geographical location : locating between the east and west and access to free waters.

4- Growing population and consumption per capita.

5 – Competitive advantages in producing steel in the region as a base for developing local industries (Automotive, Oil & Gas and …)

6 – Availability of young skilled and educated workforces.

7 – Enough experience in operation of steel plants and engineering Know-How

8 - Available infrastructures for implementation of steel plants throughout the country

Mobarakeh Steel Company (MSC) at a Glance

Integrated steel making plant (From iron ore to finished products)

Iron Ore Mine Concentrate Pelletizing (7.5 mt) Direct Reduction (11.5 mt)

Cold Rolling (1.5 mt) Hot Rolling (6.1 mt) Countinous Casting(7.6 mt) Steel Making (7.6 mt)

Galvanizing (0.2 mt) Color Coating (0.1 mt)

Tin Plating (0.1 mt)

Overview of MSC

Established in 1991 as the first flat steel producer in Iran.

Best location, center of I.R.Iran

Largest integrated steel making plant in MENA with 11 EAF’s

World largest DRI Producer, 12 m.ton with 11 Midrex Units.

Share of 50% in domestic crud steel production

Well known brand in European market

MSC production plants & subsidiaries

Sangan Iron Ore

Mobarakeh Steel Co.

Hormozgan Plant

Saba Plant

Kashan Fajr Co.

Charmahal Plant

Sepid dasht Plant

Tuka Foolad Investment

Foolad Metil Holding

32.16%

kashan steel co.

52.57%

Hosco.

Foolad Sang Co.

98.87%

Sangan iron ore mine

Msc Engineering Co. 99%

Felez Tadarok 99.6%

Tamko 37.68%

Tara Steel Trading Co. 70%

Sepahan Sport &Cultural Club

Chaharmahal Car Body

Sepiddasht steel Co.

9 Companies 22 Companies

Mobarakeh Steel Group

6.4 Jo

Capacity Development in Mobarakeh Steel Group

Our Vision

(M.Tons /Y)

Mobarakeh Steel

Company %50.5 Khuzestan

Steel Company

Esfahan Steel Company

Others %8

Source: IMIDRO

MSC Production Share In Iran (2015)

49.5 50.1 50.1 50.5

2010 2011 2012 2013 2014 2015

Finished Steel Export at MSC (Ton/Y)

4 1'47

200'000

400'000

600'000

800'000

1'000'000

1'200'000

1'400'000

1'600'000

1'800'000

2'000'000

2011 2012 2013 2014 2015

Domestic Sale 65%

Export 35%

Domestic Sale and Export of MSC

Domestic Sale 75%

Export 25%

MSC export markets

Europe 63%

Middle East

Far East 9.5%

2011 2012 2013 2014 2015

19.6 20.4 30

MSC Export Share to Europe

MSC is recognized as Excellence Organization in 2015 and the only winner of Golden Iranian Business Excellence Award (Evaluated based on EFQM)

International & National Certificates and Awards

Winner of the Global MAKE awards (Most Admired Knowledge Enterprise) 2011 to 2015

MSC among 25 Leader Knowledge Companies beside SUMSUNG, TOYOTA, TATA Steel and …

International & National Certificates and Awards

WSD’s World-Class Steelmakers Ranking

MSC Rank in the World : 10

Conclusion

Is Mobarakeh Steel Company one of the

best investment opportunities

in Iran?

? ? ? 24

3RDEUROPE-IRANFORUM

Workshop 4- Salon 1!MANUFACTURING!Tobias Sigerstad, Scania !Peggy Hollinger, Financial Times (Moderator)!

Scania’s commitment to Iran continues

Tobias Sigerstad

Country Manager Iran Scania CV AB

Sustainable Transport Solutions

Haulage Construction Distribution

Special purpose Network and services City and suburban

Intercity and coach Used vehicles Engines

The world of Scania

n  1,000 sales points n  1,600 workshops n  More than 95% parts availability n  Round-the-clock assistance

Production units 1891 Sweden 1957 Brazil 1964 Netherlands 1976 Argentina 1992 France 1993 Poland 2014 Finland 2014 India Sales and services units

Number of employees 42,000 persons

Regional Product Centres

Sales and services units

Production units

Mammut – Scania’s partner since 2005

Oghab – Scania’s partner since 2000

Factory location: Semnan Area: 500 000 m2 Production shops: 55 000 m2 Project cost: 22 Million EUR Capacity: 1700 units per year Direct employees Oct 2015 600 employees (+50 coming).

Nov 2010 Iso 9001:2008

Strengthening customer profitability

+ Customer revenue

Drivers

Vehicles

Tyres Repair and maintenance

+ Scania revenue

•  Vehicles and Engines •  Repair and maintenance •  Financing and insurance •  Used vehicles

– Customer costs*

•  Uptime •  Flexibility •  Load capacity

– Scania costs

•  Production of vehicles, engines and services

•  Research and Development •  Selling and administration •  Financing

= Customer operating income = Scania operating income

* European long haulage

Global production system

Luleå

St. Petersburg

Kuala Lumpur

Taipei

Bangalore

Johannesburg

Södertälje Oskarshamn

Slupsk Meppel Angers

Zwolle

Tucumán São Paulo

Regional product centre

Production

Global value chains

Western Europe

South America

Central and

eastern Europe

Western Europe

South America

Automotive Products Non Automotive Products

Global product

Scania truck deliveries Scania – strong presence in Iran

[VÄRDE]

Trucks

[VÄRDE]

Scania Marketshare Iran 2015

*2015 YTD until September

Scania

Product news 2016 – Oghab Parsian LE

Product news 2016 – V8 Truck

Sales and service network Iran

Sales and service point

Planned

Scania Partner Network

Increased investment ahead

Scania’s commitment to Iran continues

Solutions for Iran’s challenges

Sustainable transport – 99 percent particle reduction

Euro IV

Euro V

Euro VI

0.10 0.02 0.04 0.06 0.08

Particulate mass

Euro III Euro VI Euro IV+DPF

Regulated Fuel quality

Euro III 300 ppmS

Euro IV 50 ppm S

Euro V Euro VI

10 ppm S

Euro III 300 ppm S

Road Safety

Driver Vehicle Infrastructure

Win-win-win

n  Scania

n  Familites

n  Society

n  Environment

3RDEUROPE-IRANFORUM

Workshop 4- Salon 2!FOOD AND BEVERAGE!Sharif Nezam-Mafi, Iran-Swizterland Chamber of Commerce!Bora Karamustafa, Solico Group!John Andrews, The Economist (Moderator)!

IRAN – “The Last Frontier” in FMCG

Zurich, 3rd of May 2016

Who we are: 50+ yrs. Experience in FMCG

ASSESS Landscape Analysis

Diagnostics

DEVELOP Category Strategy

Go-to-market

Route-to-market

EXECUTE Interim Management

Brand building

Sales & Trade Marketing

Helping Companies to GROW!

PHILIPWALL BORAKARAMUSTAFA

SOLICOGROUP-BiggestFoodCompanyinIran

IRAN – FMCG “Heaven” in terms of Market Dynamics

ü  Population of 80 Million ü  Young and fast growing, 55% < 30 yrs ü  40% Population in 5 cities with high urbanization rate ü  Growing HH , 24.7mn

ü  Higher number of women graduates than men

ü  High literacy rate, 98% of youth ü  Internet & modern retailing growing fast -

+30mn internet users

ü  Regional Super Power ü  Country representing the

Shi’ite community of the world.

ü  One of the largest reserves of Natural Resources (Oil & Gas)

ü  Worlds Third largest Cement producer ü  25th biggest economy of the world

Iran – 2 Advises to start with…

Be careful who you do Business with

Anti-western government

Nationalistic

Austerity public ideal

Western values and

lifestyle

Affinity to Western

brands

Luxury private ideal

Restrictive regulations

Rich country Big proportion in C, D & E

Permissive Practice

Islamic Republic Other Values also very important

GDP PPP, IMF 2014

World’s 4th biggest oil and 2nd biggest gas reserves

POLITICAL

BRAND BUILDING

GO TO MARKET

HUMAN RESOURCES

FINANCIAL

•  Tight market for talent – An employer market

•  New set of capabilities and skills à Training & Development

•  Lack of commercial skills, esp. in selling and marketing

•  Inflated CVs (Huge focus on Eng.)

•  Limited availability of professional services (HR, Accounting, Logistics etc.)

Ø  Complex and fragmented trade landscape

Ø  Limited availability of national distributors

Ø  Price controls on certain products

Ø  High duties and customs complexities

Ø  Import bans

Ø  Grey imports and counterfeits 85%

Ø  Push vs. Pull mentality

Ø  Focus on the “Shopper”

Ø  Sales Fundamentals /1st Moment of Truth

Ø  “Hi/Bye”: Winning the Battle in the Store vs. Order Taking

Ø  EQ vs. IQ: Total lack of conceptual & ideation selling

Ø  Lack of investment in necessary tools & materials

Ø Distribution chains and infrastructure

Ø  Consumer is “the Boss” mentality

Ø  Legal and cultural restrictions in advertising

Ø  Market research - Lack of data + reliability

Ø  Complex media structure (IRIB + Satellite) àTracking

Ø  Non transparent business model of most advertising and media

agencies

Ø  Weak copyright protection and pervasive culture of copying

Ø  Legal restrictions in social media channels

Ø HR Talent: Ø New set of capabilities Ø Hard vs. Soft skills Ø Not only technical, but also commercial

Ø Brand Building: Ø Consumer focus Ø Brand Owner-Agency ecosystem Ø Availability of data

Ø GTM: Ø  Trade structure / channel management Ø  Shopper based First Moment of Truth Ø Counterfeit and Grey Imports

PRESIDENTIAL ELECTION- SPRING 2017

SUN MON TUE WED THU FRI SAT

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30 31

DOORS TO THE WORLD: Moderate-reformist bloc

becoming the largest parliamentary faction after

recent elections!

Sanctions lifting Q1 2016

Ease of doing Business

Q2-Q3 2016

Increase of Capital inflows

-$3trillion Diaspora -$150Billion unfrozen

Q3-Q4 2016

Fake & Grey to Authentic

Smuggling reduced Q4-2017

Market Growth X2/X3? 2017!

Ø  ‘The person who wants a rose must respect the thorn.’

•  Iranian proverb

3RDEUROPE-IRANFORUM

Workshop 4- Salon 3!TRANSPORTATION AND LOGISTICS!Philippe Delleur, Alstom!Wim Dillen, Port of Antwerp!Ladane Nasseri, Bloomberg (Moderator)!

Alstom presentation

MAY 2016

© ALSTOM SA, 2016. All rights reserved. Information contained in this document is indicative only. No representation or warranty is given or should be relied on that it is complete or correct or will apply to any particular project. This will depend on the technical and commercial circumstances. It is provided without liability and is subject to change without notice. Reproduction, use or disclosure to third parties, without express written authorisation, is strictly prohibited.

ALSTOM - 5/4/16 – P 2

From a multi-sector group to a global player fully focused on transport

Creation of the Alsthom company from the merger between Thomson Houston and SACM

Alstom is refocused on its rail activities and acquires General Electric’s signalling activity

Alsthom merges with GEC Power Systems and becomes GEC Alsthom

Alcatel Alsthom becomes two independent companies. Alsthom becomes Alstom and is listed on the stock exchange

Merger with Chantiers de l’Atlantique, creation of Alsthom Atlantique

ALSTOM - 5/4/16 – P 3

n  Tram, metro, suburban/regional, high speed, very high speed, locomotive

n  Components: traction, bogie, motor 45%

n  Maintenance n  Modernisation n  Spare parts, repairs & overhaul n  Support services

A leading position in rail transport

n  Signalling solutions portfolio for: - Main lines - Urban - Control and security

n  Sold as products or solutions

n  Integrated solutions n  Infrastructure 12%

A group with annual sales of over €6 billion Note: all figures including the signalling activity recently acquired from General Electric

ALSTOM - 5/4/16 – P 4

IRAN, New Line projects

•  Ispahan – Ahvaz, 545 km ST §  2 M passengers, 45 tons freight

•  Rasht Astara, 164 km ST §  2,7 M tons freight, 2 M passengers

•  Gazvin-Zanjan, 171km DT §  6,4 M tons freight, Passenger

•  Shadormalou-Ardakan, 201km DT §  19 M tons freight, Passenger

•  Meybod – Badroud, 254km DT §  5 M tons freight, Passenger

•  Badroud - Mohammadieh, 145km DT §  5,6 M tons freight, Passenger

•  Mohammadieh - Samangan, 157 km DT §  7,7 M tons freight, passengers

•  Samangan - Doroud, 130 km DT §  7,4 M tons freight, passengers

•  Chadormalou-Heydarieh, 650 km DT §  25 M tons freight, passengers

ALSTOM - 5/4/16 – P 5

IRAN, Electrification projects

•  Bafgh – Bandar Abbas 613 km

•  900 Meuros needed §  Power supply

§  Catenaries

§  SIG

§  100 coco locomotives

•  Tehran – Mashhad, 950 km

•  2 B euros, financed by China §  Full electrification

§  SIG

§  70 locomotives

•  Gamshar-Ince Buroun, 600 km

•  1.2 B euros, financed by Russia §  Financed by Russia, 1.2 Md euros

§  40 locomotives

ALSTOM - 5/4/16 – P 6

IRAN, High Speed Projects

•  Tehran – Qom- Ispahan 440 km

•  700 Meuros needed §  Infra + electrification Chinese EPCF

§  SIG + 30 HST

•  Tehran – Tabriz, 736 km

•  3 Beuros needed §  Full EPCF

§  Infra, SIG, electrification, power supply,

§  RS

•  Qom – Arak, 140 km

•  300 Meuros needed §  Full EPCF

§  Infra, SIG, electrification, power supply,

§  RS

ALSTOM - 5/4/16 – P 7

IRAN, Urban Transportation needs

10 ci&es > 500 k hab > 1M Hamedan Arak Racht Gazvin Bandar Abbas Kerman Zahedan Urmieh Yazd Ardabil

9 ci&es > 1 M hab Tehran Ispahan Tabriz Shiraz Mashhad Kermanshah Ahvaz Karaj Qom

n  19 cities are authorized by the Ministry of Interior to set up rail urban transportation systems

3rd Europe-Iran Forum Zürich, 3-4 May 2016 Port of Antwerp Wim Dillen, Head of Business Development

4/5/2016

IRAN AND ANTWERP ARE VERY SIMILAR

IRAN ANTWERP

Gateway function into Central Asia into Europe

Acces to consumer-market + 500 Mio people + 500 Mio people

Cargo generating yes yes

Maritime volume 2015 + 200 Mio tonnes + 200 Mio tonnes

Growth curve yes yes

Key values Trust /Reliability/Quality Trust/Reliability/Quality

OBOR-linked yes yes

4 KEY CHALLENGES FOR TODAY’S SUPPLY CHAINS

SUPPLY CHAIN KPI’S

Reliability

Total cost

Flexibility

Quality

Sustainability

BUSINESS CHALLENGES

Globalisation

Customer Expectations

Sustainable requirements

Risk management

Cost containment

TO BECOME MORE LEAN, AGILE, COLLABORATIVE AND INNOVATIVE

5 PORT OF ANTWERP OFFERS INTEGRATED, END-TO-END SUPPLY CHAIN SOLUTIONS

Maritime services

Distribution Intermodal solutions

Cargo handling Storage

Value added services

Trade facilitation

ICT services

Sustainable solutions

Profound knowledge and expertise

6 ROLE OF A PORT AUTHORITY: ENABLER OF THE NEW SUSTAINABLE GROWTH PATH

Landlord port Integrated, pro-active facilitator

EUROPE’S LARGEST INTEGRATED PETROCHEMICAL CLUSTER

Houston

Singapore

Antwerp Shanghai

Jubail

Training programs

Consultancy Services

SHARING KNOWLEDGE & EXPERTISE

Enhancing trade

Connecting Iran & Europe

3RDEUROPE-IRANFORUM

Panel Discussion 5!STRATEGIES FOR ENVIROMENTAL MANAGEMENT!Gary Lewis, United Nations !Christoph Grobbel, South Pole Group!Hamed Shakouri, University of British Columbia !John Andrews, The Economist (Moderator)!

3RDEUROPE-IRANFORUM

Panel Discussion 6!THEORY AND PRACTICE OF RISK IN IRAN!Henry Smith, Control Risks !Ellie Geranmayeh, ECFR!Barbara Slavin, Atlantic Council!Mostafa Beheshti-Rouy, Bank Pasargad !John Andrews, The Economist (Moderator)!

3RDEUROPE-IRANFORUM

Panel Discussion 7!THEORY AND PRACTICE OF RISK IN IRAN!Erik Belfrage, Consilio International !Joakim Reiter, UNCTAD !Koichiro Tanaka, IEEJ!John Andrews, The Economist (Moderator)!

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