Economy, Domestic Economy

$150m in Indian Credit to Support Iran Rail Upgrade

$150m in Indian Credit to Support Iran Rail Upgrade$150m in Indian Credit to Support Iran Rail Upgrade

Iran’s development bank for industries and mining has signed its first post-sanctions financing agreement with India’s Export-Import Bank to develop Iran’s railroads.

India’s Exim bank will extend a line of credit worth $150 million to Iran, supplying 150,000 tons of rail tracks. India has had a significant trade deficit with Iran since 2006/07 due to a surge in oil imports, but expects greater access to the Iranian market with the removal of international sanctions, according to the international news website of London-based magazine Public Finance.

Announcing the deal, Ali Ashraf Afkhami, chairman of the board and managing director of Iran’s Bank of Industry and Mine, said the post-sanctions era marks a new phase in Iran’s history and that the country’s leaders should work to develop Iran in this challenging period.

The news follows the launch of a Chinese-backed project to electrify more than 900 km of railroads between the capital Tehran and the northeastern city of Mashhad last Saturday.

The agreement between China and Iran was finalized in January during a visit to the country by Chinese President Xi Jinping.

The project, said to be worth $2 billion, will be financed and implemented by the Chinese. On completion, it could facilitate journeys between Tehran and Mashhad in six hours, providing faster, more energy-efficient journeys for more people.

Iran has a number of incomplete infrastructure projects that had to be suspended due to financial constraints imposed by international sanctions and is likely to reinvigorate them now following the official end of western sanctions against the Islamic Republic on Jan. 16.