VZCZCXRO1392
RR RUEHLMC
DE RUEHMU #1987/01 2392110
ZNR UUUUU ZZH
R 272110Z AUG 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 1103
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1148
RHEHNSC/NSC WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 04 MANAGUA 001987 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/CEN, WHA/EPSC, AND EEB 
TREASURY FOR SARA GRAY 
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN 
3134/ITA/USFCS/OIO/WH/MKESHISHIAN/BARTHUR 
 
E.O. 12958: N/A 
TAGS: EAID PREL ECON PGOV CVIS NU IR
SUBJECT: IRANIAN ASSITANCE TO NICARAGUA 
 
REF: A) MANAGUA 914 
 
¶1. (SBU) Summary: From July 31 to August 5, an Iranian technical 
delegation headed by Iranian Deputy Minister of Energy Hamid 
Chitchian visited Nicaragua to follow-up on assistance promises made 
by President Mahmoud Ahmadinejad.  The two government will meet 
again in November in the first meeting of the "Nicaraguan-Iranian 
High-Level Mixed Commission."  The agreements from this visit 
covered Iranian assistance in the areas of energy and mines, 
agriculture and forestry, health, ports, urban and rural housing, 
water and sanitation, fisheries, small- and medium-sized industry, 
and foreign relations.  While some concrete projects in housing and 
agriculture emerged from this visit, there was little specificity on 
overall size (funding and scale) of the assistance effort.  The 
assistance which would have the most significant effect on 
Nicaragua's development - ports, hydroelectric power and industry - 
is limited to feasibility studies and vague promises.  End Summary. 
 
The Iranians Who Came 
--------------------- 
¶2. (U) From July 31 to August 5, an Iranian technical delegation 
visited Nicaragua to follow-up on agreements signed during the 
January visit to Nicaragua of Iranian President Mahmoud Ahmadinejad 
(Ref A) and Ortega's June visit to Iran.  The Iranian team, which 
visited at least seven cities during its stay, was headed by Iranian 
Deputy Minister of Energy Hamid Chitchian and included 20 additional 
representatives from the Iranian public and private sectors (For 
full list see paragraph 15).  Together with counterparts from 
Nicaragua the Iranian delegation was divided into work teams 
focusing on nine areas: energy and mines, agriculture and forestry, 
health, ports, urban and rural housing, water and sanitation, 
fisheries, small- and medium-sized industry, and foreign relations. 
The two government teams will meet again in November 2007 for the 
first meeting of the "Nicaraguan-Iranian High-Level Mixed 
Commission," which will formalize the remaining details on the 
Iranian assistance package so the projects can be launched 
immediately.  Below we lay out the project areas that will form the 
basis for the discussion in November.  The project outlines were 
signed on August 4 by Chitchian and Nicaraguan Vice Minister of 
Foreign Cooperation Valdrack Jaentschke. 
 
--------------------------- 
Future Areas of Cooperation 
--------------------------- 
 
Energy and Mines 
---------------- 
¶3. (U) Energy and Mining: The Nicaraguan delegation presented six 
potential hydroelectric projects to the Iranians, all located near 
Rio Grande in Matagalpa and Rio Escondido in the Atlantic coast. 
The projects together represent a generation capacity of 616 MW and 
an estimated investment of $1.2 billion.  (Note: Ortega has also 
presented these projects to the Brazilian government, Mexican 
investors such as Carlos Slim, North American companies, and the 
Libyan government. End Note.)  The Iranian delegation showed 
interest in four of the projects, and undertook site visits to all 
of them with Nicaraguan experts from the Ministry of Energy and 
Mines.  The Iranians took with them the pre-feasibility studies for 
all four projects, even though they admitted to having only the 
capacity to invest in one.  On mining, both parties expressed 
interest in compiling the geologic information necessary to 
determine the mining potential of Nicaragua, as well as possibly 
establishing geological databases. 
 
Agriculture and Forestry 
------------------------ 
¶4. (U): The Iranian government has committed to support the 
Nicaraguan agricultural sector in a variety of ways, including: 
 
- Supplying 4,000 tractors to farming cooperatives at interest rates 
of no more than 6% (in addition to studying the feasibility of 
building a tractor production plant in Nicaragua); 
 
- Constructing five milk processing plants and ten milk storage 
centers; 
 
- Supplying modern irrigation equipment; 
 
- Providing training courses and workshops on agricultural 
development issues; 
 
 
MANAGUA 00001987  002 OF 004 
 
 
- Constructing industrial meat packaging plants; 
 
- Supporting the export of Nicaraguan agricultural products to Iran, 
including coffee, meat, and plantains; 
 
- Supplying agro-industrial teams specialized in grain processing 
and packaging; and 
 
- Permanently installing Iranian companies in the Nicaraguan 
agricultural and industrial sectors. 
 
¶5. (U) The Iranian government and private sector representatives 
also agreed to provide agricultural machinery to the Nicaraguan 
private sector at preferential prices, with a special focus on 
serving cooperatives and small- and medium-sized producers. 
 
Health 
------ 
¶6. (U) Both countries signed a detailed agreement on the creation of 
a health clinic in Managua that will offer patient services, medical 
consultations, and medical supplies.  The Iranian delegation also 
promised at some point in the future to: 
 
- Reconstruct health centers; 
- Supply of medical services in places where they do not currently 
exist; 
- Disease control assistance; 
- Health personnel training; 
- Health-related scientific research; and 
- High-tech laboratory services. 
 
¶7. (U) Additionally, the Nicaraguan Ministry of Health (MINSA) 
requested the Iranians consider expanding cooperation in the area of 
prosthetics and burn research to help the handicapped. 
 
Ports 
----- 
¶8. (U) The Iranian delegation expressed interest in a joint-venture 
for the first phase of the construction of two docks at the Port of 
Corinto--a project with an estimated value of $36 million, according 
to Ortega (a financing mechanism for the investment will be 
established during future negotiations).  The Iranians also 
expressed interest in a Nicaraguan proposal for a deep water port at 
Monkey Point on the Caribbean Coast of Nicaragua, on the proviso it 
include other countries and a feasibility study is completed. 
(Note: Joint-venture countries were not released, but Ortega later 
suggested Venezuela. End Note.) 
 
Urban and Rural Housing 
----------------------- 
¶9. (U) The Iranian delegation agreed with the GON on a plan to 
construct 10,000 affordable housing units within the next five 
years, with the construction of the first thousand homes beginning 
in October 2007.  (Comment: This is probably the most concrete 
project offered by the Iranian delegation.  End Comment.)  A 
long-term financing mechanism for the homes will be worked out over 
the next few months.  For its part, the GON offered the Iranians 
support as necessary for the processing of any permits required for 
foreign investment in Nicaragua. 
 
Water and Sanitation 
-------------------- 
¶10. (U) The Iranians will help to dig another 10-20 water wells in 
southwest Managua; will assist in improving and reconstructing 
Nicaragua's existing water distribution network; and will complete a 
long-term feasibility study of a Lake Cocibolca project to identify 
the most viable ways to utilize the water from the lake for the 
southern region of the country. 
 
Fisheries 
--------- 
¶11. (U) Both governments agreed to a feasibility study for the 
construction of two ports with fish processing plants. 
Additionally, the Nicaraguan delegation presented a proposal for the 
development of training programs for the fishing sector and for the 
construction of fishing storage centers, boats, and equipment. 
 
Small- and Medium-Sized Businesses 
---------------------------------- 
¶12. (U) The Iranian delegation proposed the sale of plastic 
injection machinery at preferential prices to Nicaragua with the aim 
 
MANAGUA 00001987  003 OF 004 
 
 
of stimulating the development of small- and medium-sized companies 
in the country.  The Nicaraguans were receptive to this offer and 
said that they hope to implement it in the near-term. 
 
Foreign Relations 
----------------- 
¶13. (U) In order to strengthen ties between Iran and Nicaragua, both 
governments agreed to name ambassador-level diplomatic 
representation.  They also agreed to waive visa requirements for 
diplomats and government officials.  The Iranian delegation offered 
ten scholarships for the training of Nicaraguan diplomats. 
 
Comment 
------- 
¶14. (SBU) As with all of the assistance promises from Nicaragua's 
new "friends," the proof is in the pudding.  While there are some 
concrete projects in the works, there is little specificity on 
funding or scale of the possible projects.  The assistance which 
would have the most significant effect on Nicaragua's development, 
i.e. ports, hydroelectric power, and industrial facilities, is 
limited to feasibility studies and vague promises.  Several local 
commentators point out that real proof of Iran's commitment to 
Nicaragua is in its reluctance to forgive $152 million in bilateral 
debt.  During President Ahmadinejad's visit in January, the 
Sandinista Government highlighted debt forgiveness as one of their 
goals.  Ahmadinejad said that it would be up to the Iranian 
Parliament, but promised to "look into it."  The issue has not been 
publicly raised by either side since. 
 
¶15. (U) Iranian Delegation Members: 
-- Hamid Chitchian, Deputy Minister of Energy 
 
-- Mohsen Bakhtiar, Director General of Economic Studies and Export 
Promotion, Ministry of Energy 
 
-- Ahmad Sabhani, Director of the Americas, Foreign Ministry 
 
Energy and Mining: 
-- Masoud Hojjat, General Manager of the Electricity Network of Iran 
 
 
-- Ahmand Shkoori Rad, General Manager, Ghods Niroo, electricity 
 
-- Mohammed Reza Hezarehee, geology and mining expert 
 
-- Reza Gholami, Deputy Manager of the Karun Dam, FARAB 
 
-- Reza Ebad Zahed, General Manager, Sunir Corporation, water and 
electricity sector 
 
Agriculture: 
-- Mostafa Faghih Imani, General Manager, Foundation for the 
Development of Grains and Meats 
 
-- Mohammed Reza Rikhtegar Berenji, expert, Foundation for the 
Development of Meats and Grains 
 
-- Morteza Meshkini, General Manager of a tractor factory 
 
-- Abdolhosean Mohammed Zadeh, General Manager of Sut Masin, dairy 
plant 
 
-- Abdoreza Yousefvand Mansouri, General Manager, Tehran Development 
Company (TAD) 
 
 
Health: 
-- Dr. Jamal Akhavan Moghaddam, Director of Health for the Red 
Crescent Society of Iran 
 
Ports: 
-- Parviz Ramazan Pour, General Manager of ICAN, ports and water 
pumps 
 
Urban and Rural housing: 
-- Manouchehr Nowroozi, President of the Board of Directors of 
Tabliye, construction 
 
Water and Sanitation: 
-- Mohammed Kiafar, General Manager of Mahab Ghods, water projects 
 
 
MANAGUA 00001987  004 OF 004 
 
 
-- Freydoon Solh Doost, General Manager of Bornak, piping for water 
projects 
 
-- Kamyar Baytmakoo, Marketing Manager, Mahab Ghods, water, wells 
and irrigation 
 
Small- and Medium-sized Businesses: 
-- Gilda Satahey, representing a company that does plastic injection 
machines 
 
-- Mehdi Hahian, Director of Exports, Iranhodro Diesel 
 
-- Abbas Memaria, Production Manager, Iran Tobacco 
 
TRIVELLI