Chinese state-owned banks provide $269 million syndicated buyer’s credit for Tehran Metro Line 1 Construction Project

On November 24, 2002, 14 Chinese banks — including Bank of China, China Construction Bank, Bank of Communications, Agricultural Bank of China, China Eximbank, China Everbright Bank, Huaxia Bank Co., Ltd., and China CITIC Bank — issued a $269 million syndicated buyer’s credit loan agreement with Bank Tejarat of Iran for the Tehran Metro Line 1 Construction Project. China CITIC Bank contributed $50 million to the syndicate. Bank of China contributed $994,672.71. The individual contributions of the other Chinese banks are unknown. The loan was insured (mostly likely by Sinosure) and it carried the following borrowing terms: an 8-year maturity, a 3-year grace period, a 0.35% management fee, a 0.15% commitment fee, and an annual interest rate of 6-month LIBOR (1.461% in November 2002) plus a 1.25% margin. The proceeds of the loan were to be used by the borrower to partially finance a $323 commercial (EPC) contract between Tehran Urban and Suburban Railway Company (TUSRC or 德黑兰城郊铁路公司) and China International Trust and Investment Corporation (CITIC), which was signed in November 2002. The purpose of the project was to construct a 8.2 kilometer section of Tehran Metro Line 1 from Mirdamad Boulevard (Mirdamad metro station or ایستگاه مترو میرداماد) to Ghods Square (Tajrish metro station or ایستگاه مترو تجریش) and supply 105 metro cars (passenger wagons). The 8.2 kilometer section includes 7 metro stations and it is known as the U1-W1 section. The project was designed and implemented in two phases. Phase 1 involved a 3.7 kilometer section with 3 stations and Phase 2 involved a 4.5 kilometer section with 4 stations. CITIC was the general contractor responsible for project implementation. However, Nanfang Ventilator Co., Ltd (南方风机股份有限公司) and China Railway Signal & Communication (CRSC) were also involved in the project (most likely as a subcontractor). On May 18, 2009, as part of the project’s first phase, the communication signal control system for the S1, T1 and U1 metro stations was put into operation. The next day, Mirdamad metro station, which is located next to Mirdamad Boulevard, was opened. Then, on December 13, 2009, the U1-W1 railway section was put into trial operation. By July 31, 2010, the installation and commissioning of 15 ventilation units between the S1 station and U1 station had been completed ahead of schedule and put into operation. The Tajrish metro station was ultimately opened on February 19, 2012. It is the northern terminus station of Tehran Metro Line 1. It is located at Qods Square, in the northernmost section of Shariati Street.

Additional details

1. This project is also known as the Tehran Metro North Extension Project or the Supply of 105 Metro Cars for Tehran Metro Line 1 North Extension Project. The Chinese project title is 伊朗德黑兰地铁1、2号线项目 or 伊朗德黑兰地铁项目 or 伊朗德黑兰地铁银团项目 or 伊朗德黑兰地铁银团项目 or 伊朗德黑兰地铁1&2号线项目 or 德黑兰地铁北延线工程U1-W1段投. The Persian project title is طرح توسعه ساختمان نيمه شمالي خط يك متروي تهران و تامين 105 دستگاه واگن و تجهيزات ثابت و متحرك. 2. Several sources suggest that the syndicated loan was initially signed in 1996. However, other sources suggest that the loan did not go into effect until 2002. This issue warrants further investigation. 3. Some sources suggests that the commercial contract was worth $275 million and it was financed with a $233,750,000 loan. This issue warrants further investigation.

Number of official sources

9

Number of total sources

22