Italy’s state-owned road agency Anas has signed a €3.6bn ($3.9bn) contract with the Iranian government for the construction of a 1,200km highway from Bandar Imam to Maku highway in Bazargah on Iran’s border with Turkey.

The first phase of the project will comprise 350km and require a budget of €600m and is expected to be completed by 2022.

The project is planned to be implemented in five phases.

Funding for the project will be provided 100 per cent by the Italian government.

“The Italians are moving very fast [into the market],” a source familiar with the transaction tells MEED

MEED reported in April that Italy, through its export credit agency Sace, was willing to extend uncapped funding to Iran.

Apart from roads, Italy is looking at developing and funding projects in Iran’s airport, rail and oil sectors.

Italian state railways firm Ferrovie dello Stato has said it expects to sign the first of two rail contracts agreed with Iran by February 2017.

The first contract is for the initial phase of a planned 100km high-speed rail linking the provinces of Qom and Arak, according to a Reuters report citing Renato Mazzoncini, chief executive of Ferrovie dello Stato. The project is estimated to cost €1bn ($1.1bn), according to Mazzoncini.

The expected contract is the first to be realised from the framework agreement signed by Ferrovie to build two high-speed lines in Iran when an Italian delegation led by Italian Prime Minister Matteo Renzi visited Tehran in April. The overall deal was to be worth about $4.4bn.

The second agreed rail project that the Italians intend to develop is the high-speed rail linking Tehran and Hamedan.

It is understood that the Milan Airports Company has also signed an agreement to renovate a domestic airport in Iran. Iran has earlier announced plans renovate five airports and build two greenfield airports.

Sace is also understood to have partly funded the $27bn deal for Iran to procure 118 Airbus planes.