Sinosure, which is the China Export & Credit Insurance Corporation, is guaranteeing a US$1.5-billion loan to be provided by Iran's Bank of Industry and Mine to finance the electrification of a 926-km railroad from Tehran to the eastern city of Mashhad in Khorasan Razavi Province.
The electrification of the Tehran-Mashhad railroad will take four years. When completed, it will raise the speed of the line from the current 160 kph to 200 kph, significantly reducing the duration of a trip between the two cities. For Iran, the electrification of Tehran-Mashhad line is part of its wider rail development plan to electrify all railroads by 2025, reported Financial Tribune. The electrification project will be carried out by China National Machinery Import and Export Corporation.
Iran's deputy minister of roads and urban development, Mr Asghar Fakhrieh-Kashan, said the project was worth EUR2.2 billion (US$2.56 billion) and that two-thirds of the cost would be financed by the Chinese government at a very low interest rate. The remaining one-third, he added, would be covered by Sinosure.
The state-owned Chinese credit insurer is involved in other projects in Iran. In January 2017, Sinosure opened a line of credit of up to $1.3 billion to finance the development of Abadan Oil Refinery, Iran's oldest refinery in the southern Khuzestan Province.
In May, Sinosure signed an MoU under which it will insure state-owned and private Chinese companies that intend to invest in Iranian projects.
Sinosure also covers political, commercial and credit risks. Its services include short-, medium- and long-term export credit insurance, investment insurance, bond and guarantee insurance, debt and capital retrieval business and credit assessment.