Iran minister due in Russia to 'operationalize' $5billion loan

Iran’s Energy Minister Reza Ardekanian says he will head to Moscow on Thursday to “operationalize” a $5 billion credit line for infrastructure projects.

The idea for Russia to provide the loan to Iran was first conceived in 2015, but the final documents were signed only in September this year.

The loan will be used mainly in the construction of a 1,400 megawatt thermal power plant in Sirik in Iran’s southern Hormozgan province at a cost of $1.2 billion and electrification of a 500 km railway line linking Garmsar in central Iran to the Inche Burun border with Turkmenistan at about $1 billion, he said Wednesday.

“For the remainder of the $5 billion, lost of follow-up work was done which fortunately yielded results just recently,” Ardekanian told reporters in Tehran.   

Part of the credit line, he said, will be used to finance building 2,000 train carriages for use in inner city transportation and to build a railway between Zahedan in southeast to Birjand in northeast Iran.

The rest will be used in expanding Gotvand hydropower plant's capacity to 1,640 MW from 1,000 MW and create another 180 MW capacity at natural gas-fired Ramin power plant in Ahvaz.

Ardekanian said delegates from Iran’s ministry of finance, the central bank, ministry of industry, mine and trade and ministries of transportation and energy will attend final negotiations in Moscow Thursday.

Russia and Iran signed the deal to electrify the Garmsar to Inche Burun line during a visit by Russian President Vladimir Putin to Tehran in November 2015.

The railway line extends into Turkmenistan and Kazakhstan, linking Central Asia to the Persian Gulf and beyond.

The contract covers design, sourcing of materials and equipment and construction of 32 stations and 95 tunnels, 7 traction substations, 11 section pillars, 6 duty posts of the contact station and the power supply administration building. 

In 2017, Russia’s largest manufacturer of locomotives and rail equipment, CJSC Transmashholding, signed a $2.5 billion deal with IDRO Group in Tehran for joint production of rolling stock in Iran.

Transmashholding will hold an 80% stake in the joint venture, taking over Iran’s Wagon Pars Company to produce railroad cars in the country.