MAPNA Group and the Iran Fara Bourse (IFB) signed a Memorandum of Cooperation with senior managers saying that the document aims to channel new funds for the conglomerate’s energy projects.
Held in Tehran on September 22, 2024, the meeting was attended by senior managers of MAPNA Group and IFB as well as a host of reporters.
Addressing the meeting, MAPNA Group President Mohammad Owliya said that constructive interaction with the capital market, acceptance and offering of companies in the capital market, and financing projects through the capital market by issuing various types of Sukuk, project companies, and project funds are important for advancing projects, he added, also referring to the recent provision of lease bonds as an example.
According to the memorandum of understanding with the Securities and Exchange Organization, emphasis has been placed on cooperation and preparation of seven MAPNA Group subsidiary companies for going public, he said, noting that the companies are MAPNA Parand Power Generation Company, MAPNA Lian Water Development Company, MAPNA Multimodal Transportation Company (MMT), MAPNA Locomotive Engineering and Manufacturing Company, Almahdi Aluminium Company, MAPNA Renewable Energies Generation Company, and MAPNA Wagon Pars Company.
He also noted that MAPNA is as an active company in the capital market, which aims to increase the speed and accuracy of providing information on its activities and performance to the market, noting this is crucial for enhancing shareholder productivity and increase the fundamental value of the shares.
Document to facilitate MAPNA subsidiaries joining IFB
Mohammad Ali Shirazi, the CEO of the Iran Fara Bourse, also addressed the meeting. Emphasizing the role of energy, he noted that if there is no electricity and energy, there will naturally be no economic and production growth, and consequently, no capital market. The most important concern of listed companies in recent years has been the supply of energy, especially sustainable energy, he added.
He noted that facilitating the financing process of electricity production chain benefits the listed companies in the stock market.
The MoC with MAPNA Group will facilitate the acceptance of MAPNA’s subsidiaries in Iran Fara Bourse (IFB).
“MAPNA’s subsidiaries have the necessary potential and capability to be present in the IFB, and the market is ready to further realize this bilateral cooperation,” he said, hoping to bring good news for the capital market and the energy industry in the near future.
Lease bonds success in one day
Mohammad Amin Ghahremani, an official with the Tehran Stock Exchange, also mentioned in a brief speech that the subscription of MAPNA’s lease bonds worth 7.5 trillion Rials (roughly 12.5 USD) was successfully completed on the first day of subscription.
The bonds, with a nominal interest rate of 23%, a three-month repayment period, and a three-year maturity, were issued for investment in the renewable energy sector.
IPOs to finance new projects
Elsewhere in the meeting and responding to questions asked by reporters, Owliya said that this document will lead to initial public offerings that will finance MAPNA’s projects.
MAPNA’s main business is in the energy sector, and even the transportation sector, whether in rail or electrification, significantly impacts energy efficiency and the utilization of energy resources, he noted.
MAPNA’s financing will be carried out through the main routes of current and future projects and the capital market, including IPOs, the issuance of Sukuk bonds, and the establishment of specific project funds, he said. “However, part of MAPNA’s financing comes from the claims of various clients, including the government and the Ministry of Energy, which is a significant amount.”
MANPA’s role in addressing energy imbalance in Iran
The new government and the Ministry of Energy have a specific plan for energy production, addressing imbalances, and financing projects for the summer of 2025, which is very important despite the short timeframe, Owliya said, highlighting that MAPNA Group will play a significant role in these plans.
“This summer, we had a total imbalance and production shortfall of 17,000 megawatts compared to consumption. According to the Ministry of Energy’s plan, about two-thirds of this imbalance will be covered, with approximately 70% of this coverage being MAPNA Group’s share through various methods,” said the president.
MAPNA Group is also fully prepared to produce energy from projects, including thermal and renewable power plants, and to increase and enhance capacity and efficiency through smart solutions in the grid, he added.
These plans have created commitments for MAPNA Group and, in return, commitments from the Ministry of Energy to finance the projects, he said, adding that most of this financing will be used to meet the goals for the summer of 2025.
Part of these claims will be directed towards MAPNA Group’s second and long-term plan from 2026 to 2029, involving larger projects that need more time and capital, such as the construction of the steam section of combined cycle plants, Owliya said, adding that MAPNA will also construct renewable power plants.
Collection of due claims will help the conglomerate launch larger projects that will result in a substantial impact on increasing electricity capacity to reduce imbalances and improve energy efficiency and performance, he stressed.
MAPNA’s move from B2G to B2B and B2C
Responding to a question about MAPNA Group’s cooperation with major industries, Owliya said that large industries in the mining, steel, and petrochemical sectors are among MAPNA’s major customers. “In fact, MAPNA’s business has shifted from B2G to B2B and B2C, naturally due to the reduction in government investment and its challenges, as well as the needs of large industries.”
“It should be noted that MAPNA Group has a significant share in achieving 5000 megawatts of electricity in the designated projects, and we will have many contracts in the steel, mining, and petrochemical sectors in the near future,” he added.
Leveraging capital market for financing
Elsewhere, Owliya named financing large and long-term projects as one of the main challenges of MAPNA Group. “To address this challenge, we are looking to diversify our financial resources. On one hand, we will use various financial instruments such as initial public offerings, issuing bonds, and creating investment funds to leverage the capital market’s capacity.”
“On the other hand, given our commitments to the Ministry of Energy to increase electricity production capacity and improve network efficiency, we are negotiating to receive our outstanding claims. These claims will enable us to implement large and vital projects such as the construction of combined cycle power plants and the development of renewable energy.”
Such projects will not only meet the country’s growing demand for electricity but also are steps towards increasing energy efficiency and reducing environmental pollution, he added.
“Overall, our goal at MAPNA is to play an effective role in developing the country’s electricity industry and enhancing Iran’s position in the field of clean energy production,” said the president, hoping that the conglomerate could achieve this goal with government support and private sector cooperation.