(AFP) Iran and Venezuela on Friday inaugurated a joint bank to finance their development projects, during a visit by Venezuelan President Hugo Chavez to Tehran, state media reported.

The Iran-Venezuela Joint Bank, based in Tehran, has an initial capital base of 200 million dollars, with each nation providing half of the funds, the state broadcaster said.

The Export Development Bank of Iran, which is under sanctions from the US Treasury, was tasked with creating the joint bank with the Venezuelans.

"The capital will be raised to 1.2 billion dollars with the aim of supporting joint economic, industrial and mining projects as well as speeding up the current projects," the report said.

"What happened today represents a strong will to build a new world," Iranian President Mahmoud Ahmadinejad said, attending the opening ceremony with Chavez.

Iran is under international banking sanctions over its controversial nuclear programme, which the West suspects to be a cover for atomic weapons development although Tehran insists it is purely peaceful.

Chavez, a vocal cheerleader in Latin America for Iran and its nuclear ambitions, was quoted as saying that the two countries should "further strengthen their trade cooperation."

The creation of the bank was announced in May last year, following up on an agreement which the two countries signed in March 2007.

The joint bank will work within Iran’s banking regulations and its activities will be overseen by the Islamic republic’s Central Bank, Iranian news agencies said.

The board of directors comprises four Iranians and four Venezuelans, reports said, adding that a joint investment fund will also be launched in Venezuela.

The United States has also imposed sanctions on three large Iranian banks — Mellat, Melli and Saderat, accusing them of financing weapons proliferation.

The US Treasury said in October it has imposed sanctions on the Export Development Bank of Iran (EDBI), alleging the bank helped with the country’s nuclear programme.

The sanctions mean any assets held by the bank under US jurisdiction are frozen and US citizens are barred from dealing with the institution.

Iran and Venezuela, whose outspoken president has become a hero figure to many in the Middle East, have forged increasingly strong ties based on their opposition to the United States.

Both are members of the Organisation of Petroleum Exporting Countries (OPEC), and have vowed to further strengthen ties and find common ways to cope with the global economic crisis.

Chavez on Friday denounced a decision by the Group of 20 in London to commit one trillion dollars to the International Monetary Fund (IMF) and other global bodies to help struggling economies.

"They have decided to strengthen the main culprit, the IMF, while this fund should be eliminated," he was quoted as saying by the state broadcaster.

The leftist leader’s visit to Tehran is his sixth, and comes after an Arab-South American summit in Doha.

Venezuela expelled the ambassador of Iran’s arch-foe Israel from Caracas in January in protest against the Israeli onslaught on the Gaza Strip that left more than 1,300 Palestinians dead.

Source: http://www.iranian.ws