The deal was made between Bolivian President Evo Morales, Venezuelan ambassador Julio Montes Prado and an Iranian business official Hojjatollah Soltani, he said.

Peinado said the state company to be formed would use the credit to build two plants in the southern Andean cities of Oruru and Potosi that would produce a total 700,000 tons of cement per year.

The deal has a political dimension: One of Morales's political opponents, Samuel Doria Medina, currently controls cement production in Bolivia through several private companies.