Iran railway official calls on investors to help set up leasing firms
A senior Islamic Republic of Iran Railways (IRIR) official said financing railway projects through public-private partnership, foreign direct investment and leasing are among methods to cooperate with foreign investors.
Nourollah Beiranvand, IRIR’S deputy director for planning and investment encouraged foreign investors to participate in projects to develop the railway system, noting that the Iranian government offers sovereign guarantee on foreign finances, Trend News Agency reported.
“Diversification of financial resources, use of modern financial mechanisms and drawing foreign investment are among the main policies of the IRIR to finance its projects,” he said.
Beiranvand added that the railways organization has taken measures to launch a specialized leasing company to offer services to private firms involved in upgrading its fleet. “The allocation of loans in the leasing company will be made from the resources of the national development fund of Iran,” he said.
Calling on foreign investors to cooperate with Iranian railways in launching specialized leasing companies, Beiranvand said that the IRIR has already privatized its fleet of freight and passenger carriages.
He added that about 30 percent of the locomotives of the country have also been handed over to the private sector.
Noting that the IRIR seeks to maximize the role of the private sector in supplying and utilizing railway fleet, he elaborated on the organization plans to provide econom- ic incentives to investors.
The official highlighted that the IRIR offers guaranteed purchase of services to private firms that have acquired locomotives. The organization facilitates the allocation of bank loans to private firms involved in manufacturing freight and passenger carriages.
Another way to support investors is to cover the risks of currency fluctuation by up to 10 percent, Berianvand mentioned.
The official believed that drawing investment through the capital market is yet another way to extend support to private firms involved in supplying railways fleet.
The official said that based on the initiative, his organization will cover the risks of the private firms and draw investment from the capital market.
In order to develop the railways system, the IRIR has introduced investment projects worth €28 billion which are expected to be completed within the next five years.
Over the past year, the organization has finalized investment agreements worth €3 billion and is currently in talks to conclude more deals with foreign investors.