Russia to Provide Iran 'Over Two Billion Dollars' in Loans in 2016

The First Deputy Prime Minister of Russia announced on Wednesday, December 23, that the first installment of the credit line allocated to Iran, amounting to two billion and 200 million dollars, will be paid in 2016. Igor Shuvalov told reporters in Tehran that the issue of this credit line payment was discussed with Iranian officials and details were agreed upon. According to the Russian news agency Itar-Tass, he stated that the total amount of this credit line is five billion dollars, with the first installment being two billion and 200 million dollars. He clarified that this money is intended for projects involving the construction of power plants and electrification of Iran's railways, with contracts signed during Russian President Vladimir Putin's visit to Iran. These two projects, as mentioned by Eshaq Jahangiri, the First Vice President of Iran, are the 'electrification of the Garmsar-Incheh Borun railway' and the 'construction of the Bandar Abbas thermal power plant.' During a meeting with the Russian Deputy Prime Minister, he emphasized that these projects need to be financed as soon as possible. Igor Shuvalov further stated, 'As Russian companies will send the necessary equipment for the execution of the contracts, we will also prepare the financial documents for these projects.' According to the Russian Deputy Prime Minister, the contract for this credit line will be signed in 2016, and its allocation to defined projects will also occur within the same year. Vladimir Putin visited Tehran in early December to participate in the Gas OPEC meeting and, after meeting with Ayatollah Ali Khamenei and President Hassan Rouhani, announced the two countries' intention to increase trade exchanges. During this visit, the Russian President announced the allocation of a five billion dollar credit line to Iran, which, according to him, will be spent on joint projects between the two countries. He added that 35 projects have been defined in the sectors of energy, construction, maritime ports, railways, and other economic areas, which will be pursued by both countries using this credit. Itar-Tass reported that the Russian bank 'VEB' and the Central Bank of Iran are preparing a contract regarding the payment of the two billion dollar loan to Iran. Following the agreement between Iran and six world powers on resolving Tehran's nuclear program in July of this year, countries and Western companies have announced their extensive plans to enter the Iranian market after the lifting of sanctions by sending economic delegations to the Iranian capital. Russia, which is lagging behind its Western competitors in technology and equipment, hopes to gain the most benefit from the lifting of Iran's sanctions under the shadow of close political relations with the Islamic Republic's officials and not to cede the field to Western companies. On Tuesday, December 22, it was also announced that Russia will begin the construction of two new nuclear power plants in Iran next week. The Russians are set to build nine power plants for Iran.