IRAN: A US$1·5bn loan agreement to finance electrification of the 926 km Tehran – Mashhad main line was signed by China EximBank on July 25. Iran’s Bank of Industry & Mine will act as the Iranian government’s guarantor.
The 25 kV 50 Hz electrification project forms part of a programme to upgrade the route to raise the maximum speed from 160 km/h to 200 km/h, reduce journey times from 12 h to 6 h and increase capacity to 33 million passengers and 10 million tonnes of freight per year by 2032.
Planning for the electrification has been underway since 2012. In June 2014 a contract to install and maintain overhead equipment and procure 70 locomotives was awarded to a consortium of Chinese companies China National Machinery Import & Export Corp, SU Power and local industrial group MAPNA. A year later Iran and China reached an agreement for the project to be financed through Chinese loans. Work was ceremonially launched by President Hassan Rouhani in February 2016.
The overall cost is now put at US$2·56bn, of which two-thirds is to be financed by the Chinese government at a low-interest rates and one-third would be covered by China Export & Credit Insurance Corp.