Sunday, December 17, 2017

$1.7b Chinese LOC for Iranian Rail Project

FINANCIAL TRIBUNE - Sunday, December 17, 2017

China has opened a $1.7 billion line of credit for the electrification of the 926-km railroad from Tehran to the eastern city of Mashhad in Khorasan Razavi Province, five months after a contract was signed for the project in Tehran.  According to the Persian daily Donya-e-Eqtesad, this is the first and the largest LOC to have opened for Iran after international nuclear-related sanctions against the country were lifted in January 2016, following the signing of a landmark agreement between Tehran and world powers a year earlier.  The initial contract entails the allocation of $1.5 billion in loan by Exim Bank of China to the project. The guarantee for the loan is to be provided by Iran’s Bank of Industry and Mine.  The electrification project will be carried out by China National Machinery Import and Export Corporation, otherwise known as CMC. The project is expected to take up to 48 months and raise the speed of the line from the current 160 kph to 200 kph, cut down pollution and increase the railroad’s transportation capacity. The route is already double-tracked and both tracks will be electrified.