Domestic Economy

Plan to Build Industrial Town in Armenia

Plan to Build Industrial Town in ArmeniaPlan to Build Industrial Town in Armenia

Iran is planning to set up an industrial town in neighboring Armenia to open a new gateway to the Russian and Central Asian markets, Leon Aharonian, the president of Iran-Armenia Chamber of Commerce, said in an interview with Eghtesad News on Saturday.

“The two countries are also negotiating the launch of railroad to connect Armenia to Bandar Abbas in southern Iran. Moreover, Iran is also prepared to launch an industrial town in Armenia wherein the Iranian companies can base their representatives,” he was quoted as saying.

Armenia is viewed by Iranians as an attractive trade partner that can give Iran access to Russian and European markets.  The annual trade between the two countries has surpassed $380 million, over 90% of which pertains to the import of Iranian goods. Based on the agreements signed between the two countries in recent years, the figure is expected to reach $1 billion in the upcoming years.

Iran and Armenia trade exchange has so far been confined to the field of energy with Iran supplying Armenia with gas and Armenia exporting electricity to Iran. Both countries have initiated a number of joint projects in recent times.  

One of the most important projects is the Meghri hydro power plant, which was initiated in December 2012 wherein Iran undertook an estimated $320 million construction cost in exchange for 15 years of the plant's total revenues. The plant, which is scheduled to be officially launched in 2017, will provide 90 megawatt of electricity to Iran and 80 megawatt  of electricity to Armenia.

Armenia’s membership in the Eurasian Economic Union (EEU) is also seen by Iran as an opportunity which facilitates Iran’s access to EEU’s integrated single market of 183 million people with gross domestic products of over $4 trillion.

“The measures taken so far are aimed at providing both Iran and Armenia with access to the Russian market and help expand both countries share in the lucrative market,” Aharonian added, noting that Armenia can be viewed as an important gateway for Iran’s exports to Russia.