U.S. embassy in Baku commented on the Armenian-Iranian construction project of a hydropower plant on Arax River.

"We monitor all reports of potentially sanctionable activity and stand ready to engage with countries in case of significant concerns,” 1news.az reported, quoting sources in the U.S. diplomatic mission as saying.

Laying of the foundation stone of Armenian-Iranian Meghri hydropower plant took place in Armenia’s Syunik province on November 8, with President Serzh Sargsyan and head of Armenian-Iranian intergovernmental commission on economic cooperation, Iran’s Minister of Energy Majid Namjoo present.

Armenia and Iran signed an agreement on hydropower plant construction on River Arax in 2007, the document being ratified by both parliaments in 2008. On December 23, 2011, presidents of both countries instructed the ministers to launch implementation of strategic projects on construction of oil pipeline, Iranian-Armenian railway, and hydro station on River Arax.

Armenia and Iran have agreed to build the two most powerful hydropower plants in the South Caucasus, with the HPPs to be located in Meghri on the Armenian side and Karachilare – on the Iranian side.

Each of the plans will annually generate 793 mln kWh electricity, with the Meghri station construction estimated at USD 323 mln.

After completion of the construction, Iranian Farat-Sepasat company will assume the operation of the plant for 15 years, with the electricity to be supplied to Iran to cover-up the investments of the Iranian side. After the mentioned period, Armenia will take up the operation of the plant.

Armenian-Iranian joint technical committee will coordinate the construction works.