Completed Mixed AidData Chinese Aid

China Eximbank provides buyer’s credit loan for Tehran Metro Line 4 Construction Project (Linked to Record ID#41122 and ID#41123)

$710.6K USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Tehran Urban and Suburban Railroad Company
Country	Iran
Start Date	Jun 15, 2004
End Date	Mar 30, 2029
Duration	9,054 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`41121`

Grant Description

China Eximbank provides buyer’s credit loan for Tehran Metro Line 4 Construction Project Preliminary agreements on the construction of Tehran Metro Line 4 began during Iranian President Mohammad Khatami's state visit to China on June 23, 2000.

Then, on June 15, 2004, China North Industries Corporation (NORINCO) — a Chinese state owned enterprise (SOE) — signed a $836,000,000 engineering, procurement, and construction (EPC) contract with Tehran Urban and Suburban Railway Company (TUSRC) for the Tehran Metro Line 4 Construction Project.

China Eximbank reportedly issued a buyer’s credit loan to support the financing of the EPC contract. This loan was also reportedly insured by China Export & Credit Insurance Corporation (Sinosure).

The purpose of the project was to construct a 22 km metro line (‘Line 4’) — running from east to west in the city of Tehran — that links 19 metro stations. Line 4 was constructed in four sections (phases). Section 1 runs from Ferdowsi Square to Darvazeh Shemiran. Section 2 runs from Darvazeh Shemiran to Shohada Square.

Section 3 runs from Ferdowsi Square to Engelab Square. Section 4 runs from Meydan-e Azadi to Ekbatan.

NORINCO entrusted the project's implementation and financing to NORINCO International Cooperation LTD., its wholly owned subsidiary. Construction on Section 1 began in June 2007 and it opened on April 19, 2008. Section 2 opened on March 16, 2009. Section 3 opened on May 31, 2009. Section 4 opened on July 23, 2012.

📋 Staff Comments

The Chinese project title is 德黑兰地铁4号线项目 or 北方工业公司承包德黑兰地铁项目 or 德黑兰地铁4号线 or 德黑兰地铁4号线项目.
The face value of the buyer’s credit loan from China Eximbank is unknown. For the time being, AidData assumes that the face value of the loan is equivalent to 85% of the value of the $836 million commercial (EPC) contract between TUSRC and NORINCO ($710.6 million).
According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Iran was 4.4747-years in 2004. AidData estimates the grace period of the China Eximbank loan that supported the Tehran Metro Line 4 Construction Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0 4. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Iran was 11.7464-years in 2004. AidData estimates the maturity of the China Eximbank loan that supported the Tehran Metro Line 4 Construction Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Iran was 3.5799% in 2004. AidData estimates the interest rate of the China Eximbank loan that supported the Tehran Metro Line 4 Construction Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0

📚 Sources & References

HSBC in Iran project financing accord
Complete map of Tehran metro lines
China’s Great Game in Iran
Tehran
Norinco
Norinco signs Tehran Metro deal
Massive metro line deal inked with Iran
China and Iran: Partners Perfectly Mismatched
北方国际：从“走出去”到“融进去”
中国最大国际工程承包项目德黑兰地铁4号线签约
中国通号承建的德黑兰地铁4号线二期通信工程开通
定期公告
China to help Tehran build metro
伊朗对中国企业投资合作有何保护政策
Iranian president begins China visit
对外承包工程的起步与发展
Tehran Metro Line 4 in Iran
国际贸易与国际金融 - 卜伟 - Google Books
Tehran Metro Line 4
UrbanRail.Net _ Asia _ Iran _ TEHRAN Metro
China to help Iran build fourth line of Tehran metro.
China to finance new Tehran subway line
北方国际：崛起的国际工程承包商
北方国际所承建德黑兰地铁4号线2期工程正式开通
Tehran wants Chinese loan to help finish underground project.
IRAN: Construction contract award for planned $680,000,000 metro line
CHINA NORTH INDUSTRIES CORP. (NORINCO) [China] Order #: 082304.
China's largest international engineering contracting project Tehran Metro Line 4 signed, my country's largest international engineering contracting project signed
Norinco builds a new force for international economic and technological cooperation
Phase 2 of Tehran Metro Line 4 undertaken by a Chinese company Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Tehran Urban and Suburban Railroad Company

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