The Export Development Bank of Iran (EDBI) has signed a contract with Armenia’s High Voltage Electricity Network (HVEN) for the development of $117m power transmission line to facility more electricity trade between the two countries.

Under the contract, EDBI will provide $91m financing to fund the construction of the third Iran-Armenia power transmission line.

Armenia will own 20% stake in the project, which is planned to be completed in 18 months and be commissioned in 2018.

EDBI managing director Ali Salehabadi was quoted by Fars News agency as saying: "Besides their bilateral trade ties, establishment of this transmission power line will bolster the Tehran-Yerevan overall relations and even guarantee Iran’s economic ties with Georgia since the power line will also connect Iran to the national power grids in Georgia, Russia and Turkey."

Salehabadi said that the current transmission lines between the countries have 300MW capacity and the new line would bring the total transmission capacity to 1,000MW.

The Armenian official said that the third power transmission line is likely to be connected to national power grids in Armenia, Georgia, Russia and Turkey.