Narrative
Full Description
Project narrative
Preliminary agreements on the construction of Tehran Metro Line 4 began during Iranian President Mohammad Khatami's state visit to China on June 23, 2000. Then, on June 15, 2004, China North Industries Corporation (NORINCO) — a Chinese state owned enterprise (SOE) — signed a $836,000,000 engineering, procurement, and construction (EPC) contract with Tehran Urban and Suburban Railway Company (TUSRC) for the Tehran Metro Line 4 Construction Project. China Eximbank reportedly issued a buyer’s credit loan to support the financing of the EPC contract. This loan was also reportedly insured by China Export & Credit Insurance Corporation (Sinosure). The purpose of the project was to construct a 22 km metro line (‘Line 4’) — running from east to west in the city of Tehran — that links 19 metro stations. Line 4 was constructed in four sections (phases). Section 1 runs from Ferdowsi Square to Darvazeh Shemiran. Section 2 runs from Darvazeh Shemiran to Shohada Square. Section 3 runs from Ferdowsi Square to Engelab Square. Section 4 runs from Meydan-e Azadi to Ekbatan. NORINCO entrusted the project's implementation and financing to NORINCO International Cooperation LTD., its wholly owned subsidiary. Construction on Section 1 began in June 2007 and it opened on April 19, 2008. Section 2 opened on March 16, 2009. Section 3 opened on May 31, 2009. Section 4 opened on July 23, 2012.
Staff comments
1. The Chinese project title is 德黑兰地铁4号线项目 or 北方工业公司承包德黑兰地铁项目 or 德黑兰地铁4号线 or 德黑兰地铁4号线项目. 2. The face value of the buyer’s credit loan from China Eximbank is unknown. For the time being, AidData assumes that the face value of the loan is equivalent to 85% of the value of the $836 million commercial (EPC) contract between TUSRC and NORINCO ($710.6 million). 3. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Iran was 4.4747 years in 2004. AidData estimates the grace period of the China Eximbank loan that supported the Tehran Metro Line 4 Construction Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0 4. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Iran was 11.7464 years in 2004. AidData estimates the maturity of the China Eximbank loan that supported the Tehran Metro Line 4 Construction Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Iran was 3.5799% in 2004. AidData estimates the interest rate of the China Eximbank loan that supported the Tehran Metro Line 4 Construction Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0