• Military Menu                       

• Introduction
• Systems
• Facilities
• Agencies
• Industry
• Operations
• Countries
• Hot Documents
• News
• Reports
• Policy
• Budget
• Congress
• Links

• WMD
• Intelligence
• Homeland Security
• Space

Armenia - Relations with Iran

The Islamic Republic of Iran officially recognised the independance of Armenia on the 25th of December, 1991. A declaration on establishing diplomatic relations between Armenia and Iran was signed in Tehran on the 9th of February, 1992. On the same day "The Declaration on Principles and Aims of Relations between the Republic of Armenia and the Islamic Republic of Iran" was signed to assure the Parties' intention to establish friendly relations. The solemn opening ceremony of the Embassy of the Islamic Repulic of Iran took place in Yerevan, in April 1992.

The composite of political, cultural, and religious differences between Armenia and Iran work against any substantive relations in non-economic spheres. Armenia, in its precarious geopolitical situation, must carefully think through the consequences of every step it takes with its more powerful southern neighbor. The Governmeent of Armenia's increased economic cooperation with its southern neighbor is likely driven primarily by economic security concerns; strong cultural differences will likely limit such cooperation in other areas. It has become customary for the two countries to mark each high-level visit with high-flying rhetoric and by signing a blizzard of agreements, most of which ultimately amount to little.

The Governmeent of Armenia had no choice but to cooperate with Iran on transportation and energy issues, given its closed borders with Turkey and Azerbaijan. Georgia is perennially unstable with its fractious Russia relations. In this environment, Armenia had to preserve a viable trade channel through Iran. Armenia's energy cooperation with Iran was intended solely to diversify Armenia's energy supplies, since Armenia must constantly worry about the possibility that Russian gas supplied through Georgia might be cut off due to the ever-volatile Russian-Georgian relationship. Armenia's energy cooperation projects represented a barter system, such as the seasonal electricity swap and the almost-complete small gas pipeline whose production Armenia would pay for with electricity exports. Armenia's situation makes it impossible for Armenia not to have trade relations with Iran; things would be different if Armenia's Turkish border were open.

Iran wants to be more greatly involved in the South Caucasus, their, "historical sphere of interest," because they are concerned by the revival of diplomatic activity by their historical rivals in the region, Turkey and Russia. Turkey announced a Caucasus Stability and Cooperation Platform (CSCP) in August 2008, presented as a regional diplomatic forum where countries in the region can collectively discuss security issues. Turkey invited Russia, Georgia, Azerbaijan, and Armenia to take part, but not Iran.

The Arax river, where it forms the northern natural border of Iran with the former Soviet Union, is a rushing, alpine river which runs through deep mountain gorges. Crossings are few; this was also the southern border of the Soviet Union, and was tightly controlled. Formal cross-border cooperation between Iran and Armenia is relatively limited, and the only bridge is at Meghri.

Armenia's border with Iran extends only some 40 kilometers along the Arax river and is patrolled effectively by Russian border guards with Armenian support. Much more opaque, however, is how the 95 kilometer border between Iran and the territories of Azerbaijan now occupied by Armenian and "Nagorno Karabakh Republic" (NKR) forces is patrolled. Russia, as an OSCE Minsk Group Co-Chair, has no role or presence in these territories; to be active there would be to violate Azerbaijan's territorial integrity. For the same reason, U.S. assistance programs provide no support to this region.

Armenia's southern Syunik region feels very little of the economic growth that is now so obvious in the capital. Separated from the rest of Armenia by mountains and connected by a two-lane road occasionally washed out by landslides, Syunik borders the Azerbaijani exclave Nakhichevan on the West and the "occupied territories" of Azerbaijan on the east. A thirty-kilometer international border with Iran makes up Syunik's southern border on the Araks river. As one of Armenia's two open international borders, this link should be an economic lifeline, but has not brought much in the way of economic development to this poor region, as construction materials and consumer goods from Iran simply bypass Syunik on their way to Yerevan.

In the early days of Armenia's independence and during the period when the blockade was most effective, the lifeline to Iran was vital, and Meghri benefited directly from its proximity to the border. Now, however, Armenian consumers do not buy Iranian consumer products, especially not food products, since brands they prefer are readily available from Armenian producers or from familiar sources within the CIS. Most cargoes are either building materials like tile products and plumbing fixtures of all types or products transshipped from Dubai or Turkey.

The April 2009 visit to Iran by President Sargsian was the culmination of a series of recent visits by officials of the two countries, and included the signing of eight MOUs, mostly on energy and transportation projects. Officials of both countries spoke of their desire to deepen relations. The latest round of bilateral visits produced more talk at a more senior level of the same well-known portfolio of proposed ambitious projects -- railroad, hydropower station, petroleum pipeline )- with at best modest incremental progress. Completion of these proposals will require hefty financial investments, and it remains unclear to us that there is anyone truly ready to put up the kind of money to make these lofty visions a reality. End Summary and Comment.

President Sargsian visited Iran on April 13-14, saying "I came to the Islamic Republic of Iran resolute to deepen the friendship between the two countries." He was accompanied by Foreign Minister Edward Nalbandian and several other ministers. During the visit, Presidents Sargsian and Ahmadinejad signed eight MOUs on projects including construction of an Iran-Armenia rail line, investment in a hydropower plant on the Araks River bordering the two countries, and construction of a pipeline for transport of refined petroleum -- the same set of reputed (ambitious and costly) projects that have been trumpeted at every bilateral meeting between the two sides for some time. The MOUs also address free trade and closer cooperation on energy, banking and insurance.

President Sargsian's trip followed visits in March and April by several ministers of the two countries, beginning with a two-day visit to Armenia on March 12-13 by Iran's Foreign Minister Mottaki. During that visit, Mottaki called for a deepening of political and economic ties between Armenia and Iran, and extended an invitation to President Sargsian from Iranian President Ahmadinejad to visit Iran in the near future. In response, President Sargsian called Iran a "good neighbor" and "reliable partner," and said the visit of Iran's FM will give "a new boost" to "continuously developing cooperation in all spheres."

Iran's Minister of Roads and Transport, Hamid Behbehani, visited Armenia on April 2 for discussions on the proposed Iran-Armenia railway, and Energy Minister Armen Movsisian visited Iran on April 10 to conclude discussions on a pipeline--first announced during Mottaki's visit in March--for refined petroleum that would run from Tabriz to the Armenian town of Yeraskh.

During his two-day visit in March, Iranian FM Mottaki met with President Serzh Sargsian, Prime Minister Tigran Sargsian (no relation), Foreign Minister Edward Nalbandian, Energy Minister Armen Movsisian, Parliament Speaker Hovik Abrahamian, and National Security Council Secretary Artur Baghdassarian. This was the second visit of an Iranian official since December, when Iran's Deputy Security Chief visited Armenia. That visit followed on the heels of visits to Tehran by Armenia's NSC Secretary, Artur Baghdassarian and Energy Minister Movsisian. During his meetings, FM Mottaki highlighted the role of Iran's and Armenia's presidents over the past four years in raising the level of relations. He also reviewed the status of decisions made during the Armenian-Iranian intergovernmental commission in Tehran November 2009, which included ambitious energy and transport projects.

The MOUs signed by Presidents Sargsian and Ahmadinejad addressed construction of: an Armenian-Iranian railway; a hydroelectric plant on the Araks River (which borders the two countries); a petrochemical pipeline running from Tabriz to Yeraskh (in southern Ararat Marz). In addition, the two presidents signed agreements involving cooperation on energy, banking and insurance. The two countries are also in the process of developing a high-voltage transmission line, though that project -) one of the most practical and economically viable -- is already underway and was not addressed in any of the MOUs.

The agreement on the railroad--a 500-kilometer line of which 60 km would be in Iranian territory--calls for Iran to lend Armenia USD 400 million toward construction of the Armenian segment; the total project cost is estimated at between USD 1.5-1.8 billion. Russia and Ukraine have reportedly expressed interest in financing the project, and the Governmeent of Armenia is likely to seek funding from the international donor community as well; the Asian Development Bank already agreed in late 2008 to finance a USD 1.5 million feasibility study, which a newly-appointed working group is expected to spend about three months developing. The railway would run from the northern Armenian town of Sevan to the southern border town of Meghri, before entering Iran. Such a rail line would improve transportation of energy supplies and other goods between the countries, which is now limited by often-impassable mountain roads.

The two Presidents also signed a MOU for the construction of a 300-kilometer-long pipeline carrying up to 500,000 tons of refined petroleum products (gasoline and diesel) per year from the Tabriz oil refinery in Iran to the town of Yeraskh located in the Ararat region of Armenia that borders the capital of Yerevan. The pipeline was announced on the eve of FM Mottaki's visit by Armen Movsisian, Armenia's Minister of Energy and Resources, who said the pipeline would satisfy Armenia's domestic demand of about 500,000 tons annually. Movsisian and FM Mottaki reached a preliminary agreement on constructing the pipeline during Movsisian's visit to Iran in December.

According to preliminary estimates of the Ministry of Energy, the estimated cost of the pipeline and oil terminal (to be located in Yeraskh) will be between USD 200-240 million, with work set to start this spring and be completed within two years. The pipeline was expected to lower significantly the cost of Armenia's petroleum imports, most of which currently come from Europe, shipped by rail from the Georgian port of Poti. Financing is to be provided by Iran, with gradual repayment made by Armenia after the pipeline's completion.

President Sargsian also signed a MOU regarding the countries' ambitions to build a hydropower plant on the Araks river that constitutes much of the border between Armenia and Iran. According to Deputy Energy Minister Galstyan, construction on this project, with 140 MW capacity, is expected to start this year. The Iranian government will finance the project, with the Armenians repaying the construction through electricity exports; there will be two hydropower plants, one on each side of the border.

While it had moved beyond the MOU stage, Energy Minister Movsisian announced on 20 March 2009 that the project work for the construction of a 400-kilometer-long high-voltage transmission line had been completed and that construction is to get underway by the end of May and likely to take 2-3 years. Movsisian said that Iran's Export Development Bank is financing the project, which is estimated to cost approximately USD 100 million. The power line will run across 300 km of Armenian territory and 100 km across Iran, with a throughput of 400 megawatts. The third line will complement the two existing transmission lines of 200 megawatts throughput each. Deputy Energy Minister Areg Galstyan told Econoff that the preliminary documents and agreements are all in place; the Ministry of Energy is working with USAID on dispatching and control systems.

The MOUs did not address with the Iranians either replacement of the Armenian Nuclear Power Plant (ANPP) or Iran's nuclear weapons programs. The Governmeent of Armenia has long maintained that the ANPP project will be open to international participation but has never indicated it foresees a role for Iran. With regard to a nuclear weapons program, FM Nalbandian told Ambassador that the Governmeent of Armenia abides by all relevant UN resolutions. However, as Iran is their neighbor and they must maintain good relations, they have not been pressing this issue with them, and the Iranians did not raise it.

Regular bilateral visits between Iran and Armenia almost invariably end in the issuance of effusive but vacuous statements about the importance of cooperation. The two countries have also signed MOUs in the past on various projects, most coming to nothing. President Sargsian's 2009 visit, preceded by several ministerial visits, stands out due to the announcement of at least three concrete energy projects -- the petroleum pipeline, development and financing for the railway and the hydropower plant on the Araks River. The pipeline can be viewed as a scaling back of plans for the oil refinery, but we would not be surprised if even this more limited project fails to make any real headway in the near term. Iran's pledge to finance part of the railroad--which is key to the refinery's viability--may suggest that FM Nalbandian is correct that the project may yet resurface, but securing the balance of the necessary financing may prove elusive in the current global financial climate.

The press releases that emerged from Iranian-Armenian bilateral summits, observed over time, seem spun from the gossamer of diplomatic politesse, with precious little of substance. There is room for some mutually beneficial energy cooperation, especially on electricity, and those projects tend to proceed in workmanlike fashion with little fanfare. Observers remained skeptical of the prospect of the more elaborate visions of new railroad lines, refineries, and petrochemical pipelines being realized any time soon.

The Memorandum of Understanding of the 9th session of Iran-Armenia intergovernmental joint commission held on January 27, 2010 in Yerevan indicated the arrangements in the fields of trade and economic relations, banking affairs, transport and communication, agruculture, healthcare and etc. At present Iran-Armenia intergovernmental commission has a serious role in arrangement of Iran-Armenia economic relations.