French banks will provide financing for the expansion work at Iran’s Shahid Hashemi Nejad International airport, located in the country’s second most populous city of Mashhad.

According to sources familiar with the transaction, the project received a mandate from the French government in the past few weeks.

French contracting firm Vinci signed the contract in May to undertake expansion work at Mashhad International, and for a second airport located in Isfahan.

Works for both airports are estimated to cost Vinci, and its local partner Kayson Incorporated, an estimated $400m.

Works at both airports are to be undertaken on a build, operate, transfer (BOT) basis.

Mashhad Airport Authority has over the past week awarded local Rah Shahr International Group with a contract for the supervision services of the expansion of Mashhad International airport.

The authority expects to award another contract for the project’s environmental impact assessment (EIA) soon.

It is understood that the construction work on the airport could only proceed once all required due diligence studies are completed.

The work involves the expansion of the international passenger terminal to 43,000 square-metres.

Mashhad International is Iran’s second largest airport next to Tehran’s Mehrabad International. It handled an estimated 8.2 million passengers in 2014.