MEGHRI, Armenia (Combined Sources)—Armenia and Iran on Thursday began construction on a joint hydro-electric power plant along their shared border as the Christian and Muslim neighbors sought to boost economic ties, reported Agence France Presse.
Armenia’s President Serzh Sarkisian and Iran’s Energy Minister Majid Namjoo symbolically laid the first stone for the plant located on the Arax River near the southern Armenian town of Meghri.
“Hydro-diplomacy, which we use in our policy, plays a huge role today,” Namjoo told journalists at the opening ceremony.
The $323-million, 130-megawatt plant is due to be completed in five years, and will supply energy to Iran for the first 15 years before being handed over to Armenia.
“This plant will play an important role in ensuring Armenia’s energy security,” Armenian Energy Minister Armen Movsisian told a news conference after the ceremony.
Armenia and Iran last month vowed to increase economic cooperation, boost bilateral trade and speed up joint projects including the hydro-electric plant, a third power transmission line between the countries and a railway link.
Armenia and Iran continued discussing joint projects to build a rail link and an oil products pipeline, Armenian Energy Minister Armen Movsisyan said on Thursday, reported the RIA Novosti Russian news agency.
“I’ll see together with [Iranian Energy Minister Majid] Namjou that the implementation of these two major programs currently at the stage of working discussions begins as soon as possible,” Movsisyan said.
Movsisyan and Namjou are co-chairmen of the Armenian-Iranian inter-governmental commission on economic cooperation.
“The implementation of these two projects will raise the level of economic cooperation between the two countries,” Movsisyan said.
Armenia and Iran initially planned to start the construction of the oil products pipeline in 2011 and finish it in 2014. The pipeline will deliver gasoline and diesel fuel from Iranian refineries and other Persian Gulf countries to the Armenian town of Yeraskh via Iran’s Tabriz
The pipeline will allow Armenia to import petroleum products from the Persian Gulf region at exchange-traded prices that are much lower than European market prices and considerably cut transport expenses compared with transportation by rail.
Armenia will invest $100 million to finance pipeline construction on its territory.
The North-South (Iran-Armenia) railway will allow Armenia to use an alternative route for the transportation of energy products and other commodities and gain access to external markets.