Project to triple electricity exchange capacity with Iran

PanARMENIAN.Net - The Armenian government plans to amend the 2025 state budget to complete the “Iran–Armenia 400 kV overhead transmission line and substation” project. The total project cost is about USD 106.8 million, 85% financed by a loan from the Export Development Bank of Iran and 15% through the contractor’s borrowing.

To cover the shortfall, 1.035 billion drams will be reallocated from the “Extension of operation for Armenian NPP Unit 2” budget line — 828 million drams from the first 9 months of 2025 and the rest from the year-end allocation. The cut funds will be redistributed to 2026–2028.

The project began in 2006 but suffered delays, including a 2023 incident at the Noravan substation where copper windings were stolen from two 200 MVA transformers, rendering them unusable. Contractor Sunir lacked the resources to replace the equipment, Sputnik Armenia reports.

In November 2024, the government approved a two-year budget loan of 2.007 billion drams for the project. The 2024 share has already been transferred, but the 2025 installment requires a budget revision.

Once completed, the line will raise Armenia–Iran power exchange capacity from 350 MW to up to 1,200 MW, strengthen Armenia’s energy security, reliability, and stability, and enable full use of the Iran–Armenia gas pipeline’s capacity under the “Gas for electricity” swap program.