Iran leader approves tapping sovereign fund for flood relief

DUBAI — Iran’s Supreme Leader Ayatollah Ali Khamenei has approved drawing up to $2 billion from the country’s sovereign wealth fund for relief and reconstruction after devastating floods, state media reported on Monday.

On Sunday, Interior Minister Abdolreza Rahmani Fazli said the weeks of heavy rain across the country had caused an estimated $2.5 billion in damage to roads, bridges, homes and farmland. Iran’s worst floods in 70 years had killed at least 76 people and forced more than 220,000 into emergency shelters, state media cited ministers as telling lawmakers.

“Using the National Development Fund is authorised if no other sources are available,” Ayatollah Ali Khamenei said in a letter to President Hassan Rouhani, read out on Monday on state television. 

However, he urged the government to explore other budgetary measures to fund the relief efforts before tapping the sovereign fund.

In Geneva, the International Federation of Red Cross and Red Crescent Societies said on Monday an estimated 2 million people needed humanitarian assistance as a result of the floods.

It had launched an international emergency appeal seeking 5.1 million Swiss francs ($5.1 million) to expand support by Iran’s Red Crescent to an additional 30,000 families — equivalent to about 150,000 people.

Khamenei’s letter did give an amount but Morteza Shahidzadeh, head of the sovereign wealth fund, said earlier that Rouhani had asked to withdraw $2 billion and Khamenei had in principle agreed.

The fund is worth about $92 billion, according to the Sovereign Wealth Fund Institute, which tracks the industry.

The floods have affected 4,400 villages, damaged 14,000km of roads and destroyed more than 700 bridges. They have left aid agencies struggling to cope and the armed forces have been deployed to help those affected. 

Iran’s government has said it will pay compensation to all those who have incurred losses, especially farmers, but the state budget is already stretched as US sanctions on its energy and banking sectors have halved oil exports and restricted access to some revenues abroad.

Iranian officials have repeatedly said the floods have not affected oil production and development, nor impeded the flow of crude through pipelines to client markets.