Economy, Business And Markets

Russia Offers to Join Development of Iran-Armenia free trade zone

Russia Offers to Join Development of Iran-Armenia free trade zoneRussia Offers to Join Development of Iran-Armenia free trade zone

Russia is ready to take part in the development of the free trade zone on Armenia’s border with Iran, Russian Prime Minister Dmitry Medvedev said on Tuesday after he met with his Armenian counterpart Karen Karapetyan in Yerevan.  

“We have good relations with Iran,” he said. “Therefore, we are ready to get involved if our EAEU friends and partners set up a free economic zone with Iran, including by inviting there Russian businesses,” he was quoted as saying by ARKA news agency on Wednesday.

In his words, Armenian colleagues have proposed other types of joint ventures.

“Our partners have offered us other types of co-investment,” Medvedev said. “We will think of how to finalize them, perhaps through the use of Russia’s development institutions, such as the Direct Investment Fund, Vnesheconombank and the Rostexportcenter. The outcome is what matters here.”

Karen Karapetyan said that frequent, periodic and constructive meetings had been held recently, which can add momentum to those measures agreed upon.

“We believe that the free economic zone is a good platform for Russian capital and businesses interested in the Iranian market,” he said. “Moreover, we are very open and ready to cooperate not only over the deployment of Russian businesses in the free economic zone, but also on the launch of investment cooperation. I do believe that in the near future, the ongoing extensive talks will be finalized for practical use.”

Armenia is to open the free economic zone on its border with Iran in November. The construction is estimated to cost $32 million, of which $28 million are capital spending.

This is one of the top-priority talks of Armenia’s Ministry of Economic Development and Investments. The free economic zone is planned to be built on 10-15 hectares with the opportunity of expansion to 45-50 hectares.

Although the zone has not been built yet, there are already offers from 10 companies from Russia, Iran and Europe, which have expressed their willingness to start building the zone.  

Armenia’s Economy Ministry says the zone will make it possible to create 2,500 new jobs and to build up exports from Armenia by 30%.

As many as 100 to 120 companies are expected to operate there. Their earnings for 10 years are believed to total $52 million and their products are planned to be exported to Iran, the Eurasian Economic union countries, Turkmenistan and Middle East countries.

Total investments of all the companies are estimated to reach $350-400 million over one decade.

The operation of the zone has already been registered in the Eurasian Economic Union’s customs code. As many as seven similar zones will operate in the Eurasian Economic Union’s space on duty-free system.

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