Export Development Bank of Iran (EDBI) managing director Ali Salehabadi has said the bank will provide $91m to finance a new high-voltage electricity transmission line linking the Islamic Republic and Armenia.

The $117m project, which will be 80 per cent owned by Iran and 20 per cent by Armenia, will take 18 months to build, he was reported as saying by Iran’s official news agency, Fars. The project will allow the two-way exchange of power. An average of 1 billion kilowatt hours (kWh) of power is exchanged at present through two existing cross-border lines, the agency reported.

Earlier cross-border projects include an 87-mile gas pipeline with capacity of 2.3 billion cubic metres a year, which opened in 2008. The agreement for the pipeline calls for Armenia to supply Iran with 3 kWh of power for every cubic metre it receives. Plans call for the construction of a cross-border oil pipeline. The possibility of building a railway line between the two countries has also been discussed.

Relations between Iran and Armenia since it declared its independence from the former Soviet Union in 1990 have been consistently good. It is estimated that up to 120,000 Armenians live in Iran. They form Iran’s largest Christian community.