A Chinese business delegation is in Iran to finalize a groundbreaking deal to extend loans totaling $20-billion to Iran's development projects over the next 5 to 8 years.

The deal has reportedly been reached between Iran's Interior Ministry and a Chinese-Canadian bank, an Iranian official told Fars news agency, adding that a 17-man team has arrived to finalize the agreement.

"The finance deal includes a $10.5-billion loan and a 7.5-billion-euro loan," said the official, who spoke on condition of anonymity because he was not allowed to reveal the details of the deal.

Some 3.9 billion euros of the loans would be earmarked for building reinforcement projects in older parts of Tehran, Isfahan, Mashhad and Shiraz, the official said, adding that some two billion euros would also be invested in the country's auto industry as well as in projects to develop the rail transportation sector and construct a monorail in Tehran.

"Some 1.5 billion euros would also be spent on the project to promote use of compressed natural gas [as an alternative to petrol] and to expand the taxi fleet," the official said, adding that the $10.5-billion loan would also be used to reinforce older structures in various parts of the country.

Quake-prone Iran has embarked on a massive reinforcement campaign in recent years to protect old structures against tremors, which are almost a daily occurrence in several parts of the country, after a string of powerful earthquakes flattened several cities across Iran, killing tens of thousands of people in the past decade.

HRE/BG