Iran agrees to borrow from Azerbaijan for Rasht-Astara railway

16 January 2018 14:52 (UTC+04:00)

By Sara Israfilbayova

At the meeting of the Iranian Cabinet under the chairmanship of President Hassan Rouhani it was agreed to receive a loan in the amount of $500 million from Azerbaijan for the construction of the Rasht-Astara railway. 

Under the decision three years is given for a loan and the construction of the project and seven years for the return of the loan. Earlier, Deputy Minister of Roads and Urban Development Ali Noorzad said that the loan will be allocated at low interest rates - about 2.5 percent per annum.

The Rasht-Astara railway will become part of the international North-South transport corridor and will unite the railways of Azerbaijan and Iran. At the same time, the head of the Ministry of Finance said that Azerbaijan prepares for the transfer of the Baku-Astara railway section. This is a railway line, which runs through the territories of the Lankaran and Astara regions of the country. The reason for the transfer is that the railway closes the exit to the sea.

The agreement signed between Azerbaijan Railways and Iran Railways envisages that Azerbaijan rents the railway line for a period of 15 years, and terminals for 25 years.

The transport corridor “North-South” is designed to connect Northern Europe with South-East Asia, including the unification of the railways of Azerbaijan, Iran and Russia. At the first stage, along the corridor, it is planned to transport five million tons of cargo per year, increasing later to more than 10 million tons of cargo.

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