Export and Import Bank of China (EXIM) has signed a $1.5bn deal with Iran’s Bank of Industry and Mine to finance the electrification of the 926km high-speed railway that links the capital Tehran with Mashhad, the country’s second largest city located in northeast Iran.

The contract was signed on 25 July following 18 months of negotiations, according to a local media report.

China National Machinery Import & Export Corporation is the main contractor for the project, with local Mapna to serve as subcontractor.

Mapna earlier signed a contract with Germany’s Siemens for the manufacture of 50 diesel-electric locomotives that are understood are destined for the Tehran-Mashhad railway line.

Another Chinese contractor, China Railway Group (CREC) is undertaking the $1.8bn electrification of a high-speed railway line that links the cities of Tehran, Qom and Isfahan. The subcontractor is local Khatam al-Anbiya Construction.

Other sources in Iran indicate the contract for the Tehran-Qom-Isfahan, which includes construction of the railway itself, costs €2.4bn ($2.8bn).

The line is expected to be completed in 2021. Siemens and Italy’s Italferr are the project consultants.