Iran to tap into sovereign wealth fund to tackle flood damage

Iran to tap into sovereign wealth fund to tackle flood damage
1 min read
15 April, 2019
Iran's supreme leader has given permission for civil workers to use sovereign wealth funds to tackle the country's flood.
Iran has been devastated by recent flooding [Getty]

Iran's Supreme Leader Ayatollah Ali Khamenei has given the green light for the government to use $2 billion from the country's sovereign wealth fund, for relief and reconstruction following devastating floods.

"Using the National Development Fund is authorised if no other sources are available," the supreme leader said in a letter, read out on TV by President Hassan Rouhani on Monday, Reuters reported.

But he asked the government to find alternative sources to finance reconstruction before tapping into the country's sovereign wealth fund.

Although no figure was given, Morteza Shahidzadeh, head of the sovereign wealth fund, said that the supreme leader had agreed to a request by Rouhani for $2 billion.

Around 2 million people are in need of financial assistance following the floods, according to the Red Cross and Red Crescent, with around 4,400 villages destroyed and hundreds of roads and bridges swept away.

The government of the oil-rich state has been criticised for its handling of the crisis, although officials have blamed US sanctions for worsening the crisis. Critics say billions have been wasted by government corruption and Tehran's intervention abroad.

A number of states - including regional foe Saudi Arabia - have sent in aid to help residents with some 220,000 people living in emergency shelters.