Iran Daily reports that an Iranian private sector consortium intends to invest USD 571 million in two projects in Armenia that will culminate in the commissioning of a power transmission line between the two countries. The project will also raise the Aras River hydro electric power plant’s capacity to 1.7 GW per year.

The agreement followed Iranian president Mahmoud Ahmadinejad’s visit to Armenia, during which the two countries agreed to build hydro electric power plants on the Aras River which forms the border between the two states.

Iranian energy minister Majid Namjou said that Iran will lay a pipeline to transfer gas to Armenia and, in return, will import electricity.

The president arrived in the Armenian capital for an official one-day visit on December 23rd 2011. During the president’s stay Iran and Armenia signed five other documents and MOUs concerning co-operation between the two counties. As well as the agreement over hydropower, they covered joint co-operation between the Institute of Standards and Industrial Research of Iran and Armenia’s National Institute of Standards, co-operation in social welfare affairs as well as bilateral environmental co-operation.

Trade between Iran and Armenia reached USD 270 million in 2010 and currently stands at USD 300 million. A 140 km gas pipeline connecting the two countries was built in 2007.