Iran and the International Bank of Azerbaijan have agreed on the generalities of issuing the $500 million loan for construction of the Rasht-Astara railway section, says Ali Noorzad, deputy minister of roads and urban development of Iran.

The details of the loan are currently being discussed, he told on June 10.

"Azerbaijan's Economy Minister Shahin Mustafayev visited Iran in May, familiarized himself with the course of implementation of the Qazvin-Rasht-Astara railway project and now we are discussing the cooperation between Iran and Azerbaijan on construction of the Rasht-Astara section," Noorzad said.

"The International Bank of Azerbaijan will issue a $500-million loan to this project, the generalities are agreed, but we are discussing the details and loan conditions right now," he added.

The Rasht-Astara railway section is expected to cost about $1.1 billion, and Iran is attracting half of this sum through the loan from the International Bank of Azerbaijan.

Noorzad didn't specify the source from where Iran plans to obtain the remainder of the funds.

The Rasht-Astara section will be linked to Azerbaijan through the Astara (Iran) - Astara (Azerbaijan) railway, the construction of which is now underway.

Noorzad added that the railway's another section - Qazvin-Rasht - is ready by 93 percent and will be completed by March 2017.

He said the construction of the railway's sections is planned to be completed in three to four years, but that depends on attracting foreign investments.

The Qazvin-Rasht-Astara railway is a part of the North-South transport corridor. The North-South international transport corridor will link Northern Europe and South-East Asia. It will serve as a bridge to connect the railways of Iran, Azerbaijan and Russia.

Initially, three to five million tons of cargos per year will be transported via the corridor, and the volume will increase up to 10-12 million tons in the future, according to preliminary estimates.