Russia ready to grant $1B loan to Iran: Report

Russia has finalized preparations to provide a $1 billion loan to Iran, with the funds ready for transfer once Tehran provides bank account details, Iranian media reported Tuesday.

Iran's semi-official Fars News Agency said the payment process had been finalized but disagreements among Iranian government bodies over how the money should be spent have delayed the transfer.

The loan was first reported in June and was described as the first installment of a planned $20 billion Russian loan to Iran, according to Fars.

According to the outlet, Iran's Planning and Budget Organization wants the funds used for vehicle imports, while the Oil Ministry is seeking to purchase oil industry equipment and the Agriculture Ministry wants the money allocated to imports of essential goods.

No final decision has yet been made on how the funds will be used, and the government has therefore not provided the account details required for the transfer, Fars said.

Iran and Russia have moved to deepen their economic and financial ties, including efforts to expand the use of their national currencies in bilateral trade and reduce reliance on Western-controlled financial systems.

In June, Iran announced plans to establish a ruble trading board as part of efforts to strengthen banking and monetary cooperation with Russia. At the time, an Iranian lawmaker said Moscow was expected to provide Tehran with a $20 billion ruble-denominated loan at an annual interest rate of 6%.

The developments come as Iran remains under extensive US sanctions targeting, among other areas, its oil exports, banking sector and access to the international financial system.

Washington has intensified economic pressure on Tehran in recent months, including through secondary sanctions targeting foreign entities accused of facilitating Iranian transactions.

In September, the US Treasury sanctioned Russia's VTB Bank over what it said were correspondent banking relationships with sanctioned Iranian financial institutions. Washington has also targeted financial networks it accuses of helping Tehran move funds and evade sanctions.