Russia will allocate up to 1 billion euros ($1.1 billion) for Iran to electrify a railroad section and up to 1.2 billion euros ($1.3 billion) for power plant construction, a decree published on the official portal of legal information Monday said, Sputnik reported.

The first tranche covers the electrification of the 203-mile Garmsar-Incheboron railroad in central Iran, according to the decree.

Russia’s second loan will finance up to 85 percent of the thermal power plant contracts, with the rest to cover advance payments to Russian contractors.

On June 16, Russian Energy Ministry Alexander Novak said at the St. Petersburg International Economic Forum (SPIEF-2016) that Russia and Iran might soon implement projects for $40 billion.

“Currently the total worth of the projects is about $40 billion. This is the minimum level of potential projects that could be implemented in the near future," the minister said.

Currently, according to Novak, two large contracts are prepared with Iran totaling $2.5 billion. "These are the contracts related to two thermal power plants, four blocks of 350 megawatts in terms of the development of electric power industry of Iran, as well as reconstruction of the railway line," he said.

(Source: agencies)