CRRC Nanjing Puzhen Co. secures loan — via EPCF arrangement — for 450 Subway Wagon Procurement Project

On March 7, 2018, CRRC Nanjing Puzhen Co. — a Chinese state-owned railroad rolling stock manufacturer — and the Industrial Development and Renovation Organization (IDRO) of Iran signed an EUR 500 million EPC Plus Financing (EPC+F) contract for the 450 Subway Wagon Procurement Project. According to IDRO, which is part of Iran's Ministry of Industry, Mine and Trade, CRRC Nanjing Puzhen Co. agreed to provide financing for 85% of the total value of the EUR 500 million EPC contract. The purpose of the project is the design, procurement, supply, manufacture and delivery of 450 subway wagons for the Iranian cities of Ahvaz, Shiraz and Tabriz. The project was originally expected to take 55 months to complete. As of February 2023, there was no evidence of project implementation.

Additional details

1. Ali Araqchi, IDRO’s director for international affairs, who negotiated the EPC+F contract said that ‘[t]he project is worth €500 million and will be financed by the Chinese side. The contract was signed by Naqi Manafi, IDRO’s manager for financial and economic affairs, and Wang Tao, general manager of [CRRC Nanjing Puzhen Co.].’ 2. Under most EPCF (EPC+F) contractual arrangements, a loan is extended to the EPC contractor but with a sovereign guarantee from the host government. Therefore, AidData assumes that the loan issued to CRRC Nanjing Puzhen Co. is backed by a repayment guarantee from the Government of Iran (i.e. a sovereign guarantee). 3. The precise face value of the loan that was issued to CRRC Nanjing Puzhen Co., is unknown. For the time being, AidData assumes that the face value of the loan is equivalent to 85% of the value of the EUR 500 million EPC+F contract.

Number of official sources

2

Number of total sources

7