Armenia-Iran energy cooperation new stage

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Hayastan-Iran energetik hamagortsakts`owt`yan nor shrjap`owle_56239

As reported by Iranian media, on April 18, the parliament of Iran with the support of 162 and 5 abstentions decided to finance the construction of two hydroelectric power stations on the Armenia-Iran border, which will supply electricity to both parties.

It should be noted that the hydroelectric power stations will be built on the border of Iran and Armenia - on the Araks river, and the two stations construction will be financed by the Iranian side, but the price of the hydroelectric power plant on the Armenian side will be paid back to Tehran in the form of electricity. The importance of this decision is that the level of bilateral energy cooperation is at a new height, deepening the trade turnover in this area.

The agreement on the construction of hydropower plants on the banks of the Araks river was accepted by the two countries ten years ago, but before that it was impossible. The sanctions imposed against the Islamic Republic of Iran also affected Armenia-Iran cooperation, including the energy sector. This sphere is really important for strengthening Armenia's energy security level, as well as exporting electricity to Iran. Subsequently, the implementation of this project was postponed due to financial problems caused by low oil prices, which there were in the neighboring country. However, the abolition of sanctions and the rise in oil prices over the past year allowed Iran to return to the construction of a hydropower plant and start funding it.

It should be noted that the capacity of the hydroelectric power plant on the Armenian coast of the Araks river will make up to 100 MW, and the production capacity will make about 800 million cubic centimeter/year. Similar hydropower plant will also be constructed on the Iranian shore of the river, the so-called Gharachilar station that will have such a capacity as Meghri HPP.

The basis of Armenia-Iran economic cooperation has always been energy, which is this field constitutes 2/3 of bilateral trade turnover. Armenia successfully cooperates with Iran for gas and electricity, and currently that cooperation has a tendency to expand.

Let us remind you that Armenia-Iran high-voltage system is also being built, which will give an opportunity to increase gas import to Armenia three times and to export electricity to Iran. Within the framework of this project, the second power unit will be constructed at Yerevan Thermal Power Plant, which will double the capacity of the station.

However, the Iranian Parliament’s decision on the construction of the Meghri HPP on the shores of the Araks river is a new opportunity for deepening bilateral energy cooperation, which can be followed by other programs. In this regard, Armenia is particularly interested in the project of transit of Iranian gas to Georgia, the pilot version of which was successfully completed in 2016. However, even without this program it should be noted that the the energetic sphere remains the leader in bilateral development dynamics, which is a locomotive for bilateral economic cooperation.

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