The 10 million two-year bonds carry a 17 per cent yield to maturity and are being offered on the over-the-counter Iran Fara Bourse, according to a local media report.
It is understood the bonds are guaranteed by Iran’s Planning and Budget Organisation.
In July last year, Export and Import Bank of China (EXIM) signed a $1.5bn deal with Iran’s Bank of Industry and Mine to finance the electrification of the railway, which links the capital Tehran with Mashhad, the country’s second largest city.
China National Machinery Import and Export Corporation is the main contractor for the project, with local Mapna to serve as subcontractor.
Mapna has 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.
It is not clear what percentage of the total budget will be ultimately financed by the Iranian government.
The project is expected to be completed within four years.
The railroad is a key segment of the new Silk Road, which is envisaged to connect Urumqi in China’s western Xinjiang province to Tehran and connect to railway lines in the Kazakhstan, Kyrgizstan, Uzbekistan and Turkmenistan in Central Asia.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.