According to ASSOCHAM President Mahendra K. Sanghi, “The pipeline will be highly feasible after the conclusion of the IGA which should determine the regulatory, fiscal and operating regime for at least 50 years.”

Sanghi believes the three neighbours would be beneficiaries of the pipeline as “it will help match supply with the demand for natural gas in Pakistan and India and widen the foreign exchange fund of Iran”. He also believed financing for the project will begin following the completion of a feasibility study on the pipeline, which is due at the end of October.

“The industry estimates that the feasibility study on the viability of the Iran, Pakistan and India gas pipeline is expected to be completed this month and world standard financial institutions [will] thereafter be eying to finance the 2,600 km long mega pipeline project,” said Sanghi.

“The sources of funding for the proposed US$4 billion dollar gas pipeline project should be worked out under the IGA itself in a manner that each country’s equity debt ratio is worked out in the proportion of 20% to 80%.

“The government of Iran can arrange for a loan of US$530 million from domestic as well as international financial institutions to support extension of the pipeline to Pakistan.

“In the case of Pakistan and India, each country can organise financial arrangements to the tune of US$400 million either from their domestic or international lending institutions as the ASSOCHAM has received feedbacks that international lending institutions such as the Asian Development Bank, Japan Bank of International Cooperation (JBIC) and KFW Development Bank are willing to finance the entire project under a precisely-worked out IGA,” he added.