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China provides unspecified funding for Shiraz-Farashband section of 446 km Shiraz-Bushehr Railroad
| Funder | Unspecified Chinese Government Institution |
|---|---|
| Recipient Organization | Government of Iran |
| Country | Iran |
| Start Date | Jan 01, 2018 |
| End Date | Apr 01, 2031 |
| Duration | 4,838 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 41423 |
Grant Description
On March 7, 2018, an engineering, procurement, construction and finance (EPCF) contract worth CNY5 billion ($790 million) was signed between Iran's Construction and Development of Transportation Infrastructure Company (CDTIC) and China Machinery Industry Construction Corporation (Sinoconst, a subsidiary of Sinomach) for the construction of 250 km Shiraz-Farashband section (Section-1) of the 446-km Shiraz-Bushehr Railroad (China Steps Up Rail Cooperation With Iran).
Deputy for Construction and Expansion of Railroads, Ports and Airports of the Construction and Development of Transportation Infrastructures Company affiliated to the Ministry of Roads and Urban Development, Jabbar-Ali Zakeri, told Financial Tribune that the insurance company guaranteeing the finance will be introduced within three months of March 2018.
An HPM Group source indicates that 85% of the investment for the project will be undertaken by the Chinese side, but it is unclear if this is vendor financing by Sinoconst or funding from another unspecified Chinese institution. Some sources quote €567m to be provided by the Chinese side, which is approximately 85%.
Several Iran state news (IRNA) sources confirm the presence of Chinese funding, but do not specify an amount, modality, or funding institution. Iran will be responsible for the remaining 15%.
As ratified by the Iranian Parliament, this amount will be provided from the resources of the National Development Fund of Iran. Jahanpars Group is the Iranian contractor of the project. Construction does not appear to have begun nor a formal financing agreement signed. It is unclear if financing was agreed at an earlier date.
According to a 1/3/13 IRNA source, Iran had in 2013 reached an agreement to finance the Shiraz-Bushehr railway. According to a 1/25/16 IRNA source, an MoU had been signed with an unspecified firm for financing the railway. One source puts the estimated cost of contract at $700 million USD.
Staff Comments
The Persian date on the HPM Group source is 2017, but this must be a typo, as the article references events in 2018 (cf. Bourse and Bazaar and Tehran Times sources).
Sources & References
- China to invest in Iran's new railway project - minister
- Logistics Projects Shiraz – Bushehr – Asalouyeh Railway Project
- Iran activates construction of Asalouyeh-Bushehr-Shiraz railway, قرارداد راه آهن بوشهر - شيراز امضا شد, اجرای راه آهن بوشهر– شیراز وفای به عهد دولت است, با مشاركت سرمايه گذار چيني اجراي راه آهن شيراز- بوشهر شتاب مي گيرد, تفاهم نامه تامین مالی با چین برای ساخت خط آهن شیراز- بوشهر- عسلویه, عملیات اجرایی راه آهن بوشهر- شیراز آغاز شد
- Agreement on Shiraz-Bushehr railway construction signed with Chinese Co.
- Iran Signs Deal with China to Connect Key Port to Rail Network
- China Steps Up Rail Cooperation With Iran
- Iran signs deal with China to connect key port to rail network
- MoU on financing Shiraz-Assaluyeh railway finalized with Chinese firm
- Oil Min: Chinese investors accelerate Shiraz-Bushehr rail road setting
- Iranian railway expansion continues
- China’s Silk Road fires up Iran’s rail revolution 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.
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Government of Iran
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