Russia to Soon Provide €2.5 Billion Loan to Iran

Russia will soon provide two loans worth €2.5 billion to Iran. TASS news agency reported on Monday, June 7, citing Sergey Storchak, Deputy Minister of Finance of Russia, that the internal procedures related to the payment of the two loans to Iran are nearing completion and will likely be finalized within two weeks. According to him, the amount of the first loan will be slightly more than the second, and usually, the parties determine the maximum and minimum loan amounts. Storchak stated in April that the legal issues concerning the Russian loan to Iran had been resolved and that Russian internal organizations would soon reach an agreement on it. He had previously mentioned that three issues regarding the two loans to Iran (for financing railway and power plant projects) still existed. He added that these two loans are considered pilot projects and are unrelated to the previously announced $5 billion loan. In late 2015, Igor Shuvalov, the First Deputy Prime Minister of Russia, announced the initial amount of the Russian loan to Iran for implementing these projects as $2.2 billion, while the total credit line was $5 billion. The Russian Ministry of Finance expects to obtain cabinet approval for the loan to Iran within two weeks. Storchak further stated, "As far as I know, the head of the Iranian delegation has had the authority (to sign the contract) from the very beginning. They (Iran) have a different system for government decision-making. I have the authority to negotiate but do not have the authority to sign." He also mentioned that the Ministry of Finance would obtain the authority to sign the agreement from the government within two weeks. The Deputy Minister of Finance of Russia added that "we set a ceiling for potential state budget expenditures to provide the loan. The manner of lending depends on the contracts, as they often change during execution." In his opinion, contracts are very complex and multifaceted, so not all risks can be accounted for at the contract formation stage. For example, risks related to railway and tunneling projects are such. The costs of such works in similar mountainous areas may vary. "Lending depends on the contracts and their annexes that are signed."