Economy, Business And Markets

Tehran, Baku Agree on $500m Loan for Railroad Construction

Tehran, Baku Agree on $500m Loan for Railroad Construction
Tehran, Baku Agree on $500m Loan for Railroad Construction

Iran and the International Bank of Azerbaijan have agreed on the outlines of a $500 million loan for the construction of Rasht-Astara railroad, said the deputy minister of roads and urban development of Iran.

“The details of the loan are currently being discussed,” Ali Noorzad also told Trend News Agency on June 10.

“Azerbaijan’s Economy Minister Shahin Mustafayev visited Iran in May, familiarized himself with the course of implementation of the Qazvin-Rasht-Astara railroad project and now we are discussing cooperation between Iran and Azerbaijan on the construction of the Rasht-Astara section.”

The Iranian official said the International Bank of Azerbaijan will issue a $500-million loan to this project, the details and loan conditions of which are currently under discussion.

The Rasht-Astara railroad section is expected to cost about $1.1 billion and Iran is attracting half of this sum through the loan from the International Bank of Azerbaijan.

Noorzad did not specify the source from where Iran plans to obtain the remainder of the funds. The Rasht-Astara section will be linked to Azerbaijan through the Astara (Iran)-Astara (Azerbaijan) railroad, the construction of which is now underway.

Two cities across the border are identically called Astara, one in Iran and the other in Azerbaijan.

Noorzad added that the railroad’s another section-Qazvin-Rasht-is ready by 93% and will be completed by March 2017.

He said the construction of the railroad’s sections is planned to be completed in three to four years, but that depends on attracting foreign investments.

The Qazvin-Rasht-Astara railroad is part of the International North-South Transport Corridor, which is to link Northern Europe and Southeast Asia. It will serve as a bridge to connect the railroads of Iran, Azerbaijan and Russia.

Initially, 3 to 5 million tons of cargos per year will be transported via the corridor, and the volume will increase to 10-12 million tons in the future, according to preliminary estimates.