Iran to provide $500m for Pakistan section of IP gas pipeline

Iran plans to invest $500 million to extend financial and technical assistance for laying the Pakistan section of the proposed gas pipeline between the two countries, the Fars News Agency reported on Saturday.

Iranian President Mahmoud Ahmadinejad is scheduled to visit Pakistan next week to sign the Inter-Governmental Cooperation Agreement (IGCA), according to which the Iranian government will provide a loan of $250 million to Pakistan and another $250 million will be arranged through Iranian commercial banks for engineering, procurement, and construction works on the Iran-Pakistan (IP) gas pipeline.

Pakistan is scrambling to secure funds for the pipeline project amid U.S. opposition in the wake of the sanctions imposed on Iran over its nuclear program.

According to a plan that has been proposed, Pakistani and Iranian companies would form a joint venture to lay the pipeline.

Earlier, China and Russia had committed to financing the pipeline if they were awarded construction contracts without bidding, but no progress could be made on that proposal, apparently due to U.S. opposition.