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Armenia and Iran have announced plans to start in mid-November the construction of two hydroelectric power plants on the border river Araz, which will become the most powerful in the South Caucasus.

Armenian Minister of Energy and Natural Resources Armen Movsisyan told journalists that the proposal to start the construction of the power plants came from the Iranian side.

Referring to his Iranian counterpart Majid Namju, Armen Movsisyan said that in the issue of constructing the Megri HPP, "all problems have been solved and there are no obstacles to the implementation of the programme".

Yerevan and Tehran plan to begin construction in parallel. On the Armenian side, the HPP will be located in Megri and from Iran - in Qarachilar. The construction of the Megri HPP is estimated at $ 323 million and will be financed by Iran. Armenia will pay for the investment with electricity: Once the station is in operation, it will be operated by the Iranian company Farat-Sepasat for 15 years and the electricity generated will be supplied to Iran.

The ceremony to lay the foundation of the Megri HPP was previously scheduled for 22 August 2012, but was not held due to the devastating earthquake in Iran on 12 August.

It is assumed that the two hydroelectric power plants on the Araz River will be connected with a drainage tunnel. Each station will annually produce 800 million kW/h of electricity.

It is difficult to judge how Iran, which is in the grip of international sanctions, and the region's economic outsider Armenia are able to implement such a multi-million-dollar project. Nonetheless, Yerevan has already made a statement to this effect.

Although Tehran has promised to finance the Armenian stake in the project, the financial position of Iran in the face of strong US and EU sanctions suggests that these promises will likely remain promises.

Meanwhile, according to experts, the construction of a hydroelectric power plant on the Araz River can cause a very negative environmental impact, including for Azerbaijan. Therefore, under international law, this project must be agreed by all the countries through which the river flows. However, given that Armenia and Azerbaijan are in a state of war, we can hardly expect our neighbours to ask Baku for permission.

In this case, what consequences will the construction of the Iran-Armenian hydroelectric power plants on the river have and is it possible to implement this project in the current realities? The head of the Caspian Research Centre and Professor of Geography Cingiz Ismayilov helped us to grasp this question.

- What is the legal basis for the project to build the hydroelectric power plants on a river that flows through the territory of Azerbaijan?

- Under international law, any use of trans-border rivers, whether it is irrigation or the construction of hydroelectric power stations, requires coordination with the countries through which the river flows. A number of international standards and intergovernmental agreements stipulate that if any country or countries are to change the course of the river or take a lot of water, it is compulsory to obtain the consent of the other countries through which the river flows. This concerns the legal side of the project to build the Armenian-Iranian HPP.

It is clear that in the case of Azerbaijan, through the territory of which the Araz flows, Armenia will openly defy international norms. This is predictable, since we are at war with it. Iran is another matter. This country recognizes the territorial integrity of Azerbaijan and strives to build good neighbourly relations with us. It must be remembered that without the financial and technical participation of Iran, this hydropower plant cannot be built. This is very important. And our Foreign Ministry is working with the Iranian side.

By the way, if we neglect the international norms, Azerbaijan is able not to allow this project to be implemented. With adequate actions, Azerbaijan can regulate the flow of the Araz in such a way that only half of the current water level will reach the HPP. It is enough to take a large amount of water in Nakhchivan and to build a dam or hydroelectric power station in order to reduce the possibility of using the Araz for electricity generation. This is for the attention of Tehran and Yerevan. But unlike Armenia, Iran is a country that officially declares friendly feelings towards Azerbaijan and, of course, must comply with all norms of cross-border cooperation.

- That is to say Iran and Armenia may have nothing to generate electricity from?

- Yes. Designing the power plant, they calculated the volume of the river flow and the average standard of performance. If Azerbaijan builds a small power plant on the Araz River, the two Armenia-Iran hydroelectric power plant projects will turn out ineffective.

- How strongly can the construction of the hydroelectric power plants affect the ecology of the region?

- Of course, the construction of power plants on the Araz requires the approval of a whole set of environmental issues. The fact is that if a water reservoir is built, it will flood a huge area. It is not mountains, but valleys and foothills. If valleys and foothills that can be used for agriculture are flooded, the landscape and the ecological state of the adjacent territory will change. We need to determine what will happen to the Armenian-occupied Azerbaijani territory bordering on Iran. This can lead to complications in the process of demarcating the Azerbaijani-Iranian border because a very large section of the border between the two countries runs through the middle of the Araz River. If a power plant is built, the channel of the river might change. In this case, how shall we demarcate and delimitate the border, particularly in the occupied zone and in Armenia's Megri District where the borders of the three countries - Azerbaijan, Iran and Armenia - come closer together? Therefore, the coordination of the construction of the Armenian-Iranian HHP requires the involvement of international organizations as well, such as the International Organization of Environmental Monitoring, the European programme for trans-border rivers created and funded by the European Union, the Regional Environmental Centre Caucasus and others. The latter includes a number of government agencies, non-governmental organizations and experts from Georgia, Azerbaijan and Armenia. For several years, this organization has been engaged in a project on the cross-border use of the Kura River. A similar project is being developed on the Araz. But it is hard to say how successful it will be.

It is well known what huge ecological damage Armenia causes to the Araz. Large quantities of industrial waste are discharged into the river in Armenia.

The issue of building power plants on the river affects the political, environmental, and economic interests of Azerbaijan. Our state agencies are already engaged in this issue. First of all, the Iranian side needs to realize its responsibility for the project. The flooding of a vast area will not only change the microclimate, but also increase the risk of earthquakes in Armenia's Megri District, which is already a seismically active zone. In general, I must say that reservoirs trigger earthquakes. This should not be ignored either. That's why the environmental and social impacts of the construction of power plants are carefully considered around the world.

In addition, Azerbaijan uses the Araz and Kura water for irrigation. That is to say it directly affects our economic interests.

- Can you rough estimate the environmental damage?

- It is difficult to calculate the damage. After all, the area of the reservoir, the height of the dam, etc. are not known. With specific information on the project, we will be able to judge the extent of environmental damage.