Russia, Iran lift legal barriers on $5-bln State loans
Apr 18, 2016 09:41 AM EDT
Surpassing legal barriers, Russia and Iran have agreed on a State loan and entered into a preliminary pact on it. As per the preliminary accord, Russia will grant a $5-billion loan to Iran. Both the nations have successfully removed the legal barriers on intergovernmental loans to pave the way for easy disbursal of the State loan.
According to preliminary agreement, Moscow will extend loan to Tehran. Sergei Storchak, Deputy Foreign Minister of Russia has announced the $5-billion State loan would be granted to Iran. Russian President Vladimir Putin during his visit to Tehran in November 2015 assured Iran on the grant.
Sputnik International reports that Russia is planning to allot the first tranche of grant to the tune of $2.2 billion in 2016. This grant amount will be invested in projects electrification of Railway system in Iran. Russian First Deputy Prime Minister Igor Shuvalov said that first round of grant would be released soon.
However, Storchak didn't give more details about original difference over the loans. What were the legal hurdles on loans and how they have been resolved not revealed to the media. He also further said that both the nations will soon take a decision on disbursal of State loan amount to Iran. "The subject is closed," RIA News agency quoted Storchak as saying "only procedural matters are left."
Reuters further adds that Russian grant of loan amount will be invested mostly in transport, geological exploration in those projects being implemented by Russian companies in Iran. However, the first round of loan amount is expected to go into infrastructure sector.
While explaining bout contradictions were legal barriers, Storchak said: "Contradictions in the intergovernmental loan have been removed. I saw my (Iranian) colleague here in Washington and he said that we're preparing clean texts. We'll sign them as soon as the decision is made by the authorities."
Russia Beyond The Headlines further adds that Russia's loan of $2.5 billion would be earmarked for infrastructure projects. Both the nations have yet to take a final decision and conclude terms and conditions on the State loan. Energy Minister Alexander Novaak held discussions with Mahmoud Vaezi, the co-Chairman of the Russian-Iranian intergovernmental Commission.
For investing the loan amount, the profile companies confirmed that they will sign new contracts pertaining to new projects. This will include construction of a thermal power plant and rail line electrification. However, profile companies are waiting for the final outcome so that they understand terms and conditions in a better way. The ongoing discussions are on a total of up to $2.5 billion for those two projects.