The Indian government has approved a USD 150 million credit facility to support the development of Iran’s Chabahar port which lies outside the Persian Gulf, near Iran’s border with Pakistan.
According to the government, India is negotiating this project to facilitate the growing trade and investment with Iran and other countries in the region, notably Afghanistan and also to provide opportunities to Indian companies to expand their footprint in the region.
Under a Memorandum of Understanding (MOU) agreement signed between India and Iran in May 2015, India is expected to equip and operate two berths in Chabahar port during the first phase of development. A total amount designated for these works is USD 85.21 million, plus an annual revenue expenditure of USD 22.95 million on a ten-year lease.
The countries also agreed that the ownership of equipment will be transferred to Iranian side on completion of 10 year period or for an extended period.
To be operated by the India Ports Global Private Limited, the berths are expected to start working within a period of maximum 18 months.