Russia will also provide a loan in the amount up to �1 bln to Iran for Garmsar - Ince Burun railway segment electrification

MOSCOW, July 18. /TASS/. Russia will extend a �1.2 bln government export credit to Iran in order to finance construction of a thermal power plant (TPP).

The Iranian side will use borrowed funds to cover 85% of 1.4 MW TPP construction price.

The Finance Ministry will sign the agreement on behalf of Russia after talks.

It was reported earlier Russia�s Technopromexport signed an agreement with the Iran�s Ministry of Energy on construction of two power plants.

Russia will also provide a loan in the amount up to �1 bln to Iran for Garmsar - Ince Burun railway segment electrification. The statement was made in the intergovernmental agreement posted on the Russian government�s website on Monday.

According to terms of the agreement, the loan is granted to Iran for five years with the interest rate of 2.77% per annum.

The project provides for electrification of 495 km long Garmsar - Ince-Burun railway line. Electrification will also cover 32 stations and 95 tunnels. 7 traction substations, 11 section pillars, 6 duty posts of the contact station and power supply administration building will be built. According to preliminary estimates, the project will be implemented in 36 months.

By TASS