On September 16, the RA Government instructed the RA Ministry of Energy and Natural Resources to sign an agreement on the construction of a hydro-power plant on the Araks River with the Farab Sepasad Company (Iran).
With a view to constructing and operating hydro-power plants on the Araks River, in 2007 and 2008, the Armenian and Iranian Governments signed intergovernmental agreements, which were ratified by the Armenian and Iranian parliaments. On April 14, 2009, during the Armenian President’s visit to Iran, the RA Ministry of Energy and Natural Resources and Ministry of Energy of Iran signed a memorandum on financing the Meghri HPP. The Iranian side expressed its readiness to purchase all the amount of energy to be generated.
The Iranian Ministry of Energy introduced the Farab Sepasad Company as an investment company to resolve all the financial and organization problems. The HPP was to be completed within five years, with the energy to be transmitted to Iran for the following 15 years by means of a 230kw power line to be constructed by the investor. RA Minister of Energy and Natural Resources A. Movsisyan reported that the estimated cost of electric energy is U.S. $0.05-0.06 per kw for return on investment to be ensured. After the 15-year-period expires, the Meghri HPP is to be transferred to Armenia free. Under the agreement, the investment company is to be granted tax benefit and customs facilities while it operates the Meghri HPP. Minister Movsisyan said that a hydroelectric system consisting of two HPPs, the Meghri HPP (to be owned by Armenia) and the Karachinar HPP (to be owned by Iran).
The Armenian HPP is to generate about 180m kw/h of energy annually (U.S. $323m in 2009 prices).