January 27, 2016 / 1:48 PM / 2 years ago

Protesters march, France eyes business deals as Iran's Rouhani visits

PARIS (Reuters) - France and Iran hailed the sale of Airbus planes and the renewal of a decades-old carmaking venture as symbols of thawing relations on Thursday while protesters in Paris tried to get human rights onto the agenda.

President Hassan Rouhani was accompanied on his official visit to Paris, the first by an Iranian president since 1999, by ministers and business leaders who announced deals including a joint venture between carmakers PSA Peugeot Citroen (PEUP.PA) and Iran Khodro and plans for Iran to buy 118 Airbus (AIR.PA) passenger planes to update its ageing fleet.

His visit after a stop-off in Rome for more deals follows an agreement between Iran and the west on Iran’s nuclear programme, allowing the lifting of sanctions this month.

The deals were signed at a ceremony attended by Rouhani and French President Francois Hollande.

Construction group Bouygues (BOUY.PA) and airport operator ADP (ADP.PA) are set to build an extension for Tehran airport, while Vinci (SGEF.PA), another building firm, is lined up to design, build and operate new terminals for the Mashhad and Ispahan airports.

French oil company Total said it would buy some 200,000 barrels of Iranian crude from the OPEC producer.

There were also deals in shipping, health, agriculture and water provision, all signed despite continued diplomatic tensions.

DEALS UNFINISHED, BANKS WARY

The Airbus deal alone is worth $27 billion at list prices and French government sources put a 15 billion euro ($16 billion) overall tag on the agreements.

Chief Executive of Suez Environment, Jean-Louis Chaussade (R), Iranian Energy Vice-Minister, Alireza Daemi (L), Iran's President Hassan Rouhani (L Rear) and the French President Francois Hollande (hidden) attend a bilateral political, cultural and economic agreements signing ceremony at the Elysee Palace in Paris, France, January 28, 2016. REUTERS/Stephane De Sakutin/Pool

But most have yet to be finalised or are subject to conditions. Senior French bankers have expressed wariness.

Iran’s industry minister Mohammad Reza Nematzadeh said an agreement between French export-credit group Coface (COFA.PA) and the Iranian central bank signed this week was an important step in the right direction.

But he said French banks must support a corporate push into post-sanctions Iran. “If they don’t get active, there will be no increase in business,” he warned.

Slideshow (7 Images)

For Peugeot, the Iranian factory tie up is critical. When it suspended sales in Iran in 2012 it lost nearly 10 percent of global deliveries and interrupted a relationship dating back more than 50 years.

Under Thursday’s deal, set to be finalised in the middle of this year, Peugeot and Iran Khodro plan to modernise a factory near Tehran and be producing cars by mid 2017.

They target an initial 200,000 vehicles a year making Peugeot 208, 2008 and 301 models with a Peugeot investment of 400 million euros ($436 million) over five years.

Away from the signing ceremonies and speeches, an estimated 3,000 people marched through Paris seeking to raise awareness about human rights. A protestor from the Femen womens’ activist group dangled in a mock hanging from a bridge with an Iranian flag painted across her naked chest.

Human Rights Watch criticised Iran on the death penalty and abuse of rights of women and minorities. It also said the state of emergency declared by Hollande after Islamist militant attacks in Paris on Nov. 13 last year threatens rights to liberty and freedom of movement.

($1 = 0.9125 euros)

Additional reporting by Tim Hepher, Michel Rose, Bate Felix, Gilles Guillaume and James Regan; Writing by Andrew Callus; Editing by Leigh Thomas and Ruth Pitchford

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