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Indian Bank to Extend $150m for Chabahar Development

Iran is expected “very soon” to approach India’s Exim Bank seeking disbursement of the first tranche of $150 million loan to fast-track the development of Chabahar Port. [ادامه خبر]

Iran is expected “very soon” to approach India’s Exim Bank seeking disbursement of the first tranche of $150 million loan to fast-track the development of Chabahar Port.

The Indian newspaper Financial Express also reported, citing official sources, that based on the pact signed between Iran and India in May last year, India is to equip and operate two berths in Chabahar Port Phase I with a capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.

Ownership of the equipment will be transferred to the Iranian side upon the completion of 10 years or for an extended period, based on mutual agreement. The application from the Port and Maritime Organization of Iran is to go to the EXIM Bank of India. As per the pact for development of the port, the contract will be activated from the day the loan is disbursed.

“We did request Iran to do some quick action to send us the first application for the credit and I am very happy to mention that this application was presented to the Central Bank of Iran [and] to the Bank of Industries and Mines in Iran, which should now be forwarded to the EXIM Bank of India … Very soon the first tranche of the credit line will be disbursed to the Port and Maritime Organization in Iran,” an Indian Shipping Ministry official said.

The Iranian side during the discussions for finalization of contract agreement for Chabahar Port had requested for a credit of $150 million for its development.

“In accordance with request made by PMO of Iran, the activation of this contract is linked to provision of credit to Iran,” as per the Shipping Ministry.

Chabahar Port, located in the Sistan-Baluchestan Province in Iran’s southern coast, lies outside the Persian Gulf and is easily accessed from India’s western coast, bypassing Pakistan.

On Wednesday, Shipping, Road Transport and Highways Minister Nitin Gadkari said the Indian government is hopeful that the strategic Chabahar Port in Iran will be operational by the end of 2018 and it would be a “win-win” situation for India, Iran and Afghanistan as it would serve as a “growth engine” for the entire region.

For greater trade and investment flow with Iran and neighboring countries, the Indian Cabinet last year cleared proposals for development of Chabahar Port, including a $150 million credit from Exim Bank. It also authorized the shipping ministry to form a company in Iran for implementing the Chabahar Port Development Project and related activities.

Last month, Gadkari visited Tehran as a special envoy of India deputed by Indian Prime Minister Narendra Modi at the inauguration of the second tenure of Hassan Rouhani as the president of Iran.

During his visit, both sides reiterated their commitment to complete and operationalize the port at the earliest that would contribute to bilateral and regional trade and economic development, and also provide alternate access to landlocked Afghanistan to regional and global markets.

India has already built the Zaranj-Delaram Road in Afghanistan where the cargo reaching Zahedan can connect to.

The rail route is aimed at connecting the existing rail network of Iran to Zahedan, and subsequently to Mashhad to the north, thereby providing access to Turkmenistan as well as northern Afghanistan through its connection to the Bafq-Mashhad route.

This project will significantly enhance the opportunity for trade and business among the nations. Chabahar-Zahedan Railroad Project is located in Sistan-Baluchestan.

Besides, for the bilateral pact to develop Chabahar, for which India will invest $500 million, a trilateral agreement on transport and transit corridor has also been signed by India, Afghanistan and Iran.

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