New Energy Projects with Iran set to Launch

YEREVAN (RFE/RL)—Armenia announced on Wednesday the impending launch of three more joint energy projects with neighboring Iran that are estimated to cost more than $700 million.

Energy Minister Armen Movsisian said the two nations will start building this year a third high-voltage transmission line connecting their power grids, a hydro-electric station on the Arax river marking their border, and a pipeline that will pump Iranian oil products to Armenia.

The Armenian and Iranian governments have spent years negotiating on these projects and preparing for their implementation, which would give a massive boost to their economic ties.

With a projected capacity of 140 megawatts and an estimated cost of $350 million, the hydro-electric station is to be constructed by Iranian firms. According to Movsisian, the Armenian side will pay half of the bill with supplies of electricity to the Islamic Republic.

Movsisian told journalists that the two governments will also equally co-finance the $180 million construction of the pipeline which he said will get underway this fall. It will enable Armenian fuel companies to import petrol and diesel fuel at prices well below the international level, he said.

Movsisian added that the two sides will also start “within approximately one month” work on the third power transmission line. He said earlier that it will take 18 months.

The facility will allow for large-scale exports of Armenian electricity to Iran to be mainly generated by Iranian natural gas. Armenia began importing it, in modest amounts, through a newly constructed gas pipeline in May last year. The volume of these deliveries is due to increase drastically to at least 2 billion cubic meters per annum in the next few years.

Armenia is pressing ahead with these projects despite tougher sanctions which the U.N. Security Council imposed on the Islamic regime in Tehran last month over its controversial nuclear program. The sanctions do not directly target the energy sector, the main area of Armenian-Iranian economic cooperation.

Official Yerevan said on June 10 that it is closely monitoring the intensifying standoff between Iran and the West and hopes for its “peaceful” resolution. Visiting Germany two weeks later, President Serzh Sarkisian urged Western powers to address Tehran’s “sense of being in danger” and reckon with its geopolitical interests in the region. He also held up these and other Armenian-Iranian economic projects as a model for regional cooperation.