China signed a contract with Iran to finance the electrification of a 926km railroad from Tehran to the eastern city of Mashhad with a $1.5 billion loan.
As per the agreement signed between the two sides in Tehran on Tuesday, the guarantee for the loan, which is to be granted by Exim Bank of China, will be provided by Iran’s Bank of Industry and Mine, Islamic Republic of Iran Broadcasting reported.
The electrification project will be carried out by China National Machinery Import and Export Corporation, otherwise known as CMC.
A subsidiary of China General Technology Group, CMC is an international engineering contractor in transportation infrastructure, industrial facilities, and power plants. In 2014, the company constructed the Ankara-Istanbul high-speed railroad, together with China Railway Construction Corporation Limited and Turkish companies.
Iran's deputy minister of roads and urban development Asghar Fakhrieh-Kashan has earlier said that the project is worth €2.2 billion ($2.56 billion) and that two-thirds of value would be financed by the Chinese government with a very low-interest rate. The remaining one-third, he said, would be covered by Chinese insurer Sinosure (China Export and Credit Insurance Corporation.
Iran’s MAPNA Group is the project's main domestic subcontractor, according to Fakhrieh-Kashan