The Asian Development Bank (ADB) denies reports it will help fund the construction of the proposed $2bn Iran-Armenia railway network, saying it cannot do so as Iran is not a bank member.

Media reports in Armenia at the end of January had said that the ADB would be issuing an international tender for the feasibility study into the construction of the railway in April 2010.

However, the ADB has now said it will not be involved in the project and has raised the issue with the Armenian government to prevent any further confusion.

“We have discussed this with the Armenia government and the government assured us that they are not linking ADB activities in Armenia with Armenia-Iran relations,” says a source at ADB.

“We have raised our concern on this. As a result, at the last government sitting on 4 February 2010, the Prime Minister [Tigran Sargsyan] made a special announcement for government members regarding this.”

Austria’s ILF Consulting Engineers recently completed a pre-feasibility study on the railway network.

The rail project involved a 470-kilometre rail line connecting the two countries. The majority of the railway will be on Armenian territory.

Tehran previously said it is willing to finance its own section of the rail project.