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Iran, Turkmenistan Ink Agreements in Roads, Power, and Trade Sectors

By Nigar Bayramli November 21, 2023

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Iran’s Minister of Roads and Urban Development Mehrdad Bazrpash and Turkmenistan's Minister of Foreign Affairs Rashid Meredow signed two cooperation documents, worth about $1 billion, at a meeting in Ashgabat, on November 17, 2023. / Tasnim News Agency

Iranian and Turkmen senior officials have signed agreements for the construction of roads and power generation facilities.

The signing took place during the visit of Iran's Road Minister, Mehrdad Bazrpash, to Ashgabat, where he attended a session of the Iran-Turkmenistan Joint Economic Commission on November 17, as reported by Iran’s Tasnim News Agency.

In the realm of electric power cooperation, an agreement was reached for the construction of electric power transmission by Iran through the bartering of gas valued at $200 million. Additionally, an initial agreement for the export of $140 million in electric power equipment to Turkmenistan was reached, culminating in the signing of a contract between Iran’s Power Generation and Distribution Company (known as TAVANIR) and the Turkmen side.

Concerning the transport sector, an accord was made to increase the number of transit wagons from the Sarakhs Border to 600 wagons per day and from Incheh Borun to 100 wagons. Officials are tasked with visiting the border to address existing issues. In air transport, Bazrpash announced an agreement to launch flights from Mashhad to Ashgabat, or through other countries to Mashhad and then to Ashgabat. The schedule for passenger and cargo flights will be determined in the next two months.

Port agreements were also established, with the signing of sister port documents for Amirabad Port and Turkmenbashi Port. To complete international corridors, both nations decided to convene a multilateral meeting involving Kazakhstan, Turkmenistan, Iran, and Oman within the next two months. The aim is to reduce transit tariffs and enhance freight transit along the International North-South and East-West transport corridors.

In road construction, a memorandum of cooperation for a 242 km road in Turkmenistan by an Iranian company, valued at $500 million, was signed. The implementation contract is expected to be signed in the near future. Border market activation between Iran and Turkmenistan was discussed, with the Bajgiran market border currently active and plans for a joint committee to activate the Incheh Borun market border within two months. Iran proposed launching three additional border markets in the Golestan and North Khorasan provinces.

Highlighting the strategic importance of Sarakhs, the launch of the Chabahar-Zahedan-Birjand-Mashhad-Sarakhs Railway as a primary route for freight transit to the south was emphasized for strengthening regional connectivity.

During the signing ceremony, Bazrpash stated that the roads to be built would be part of the north-south and east-west transport corridors.

“The east-west transport corridor has undertaken an important role between the two countries on the Silk Road”, Bazrpash said, and added that border marketplaces also play a leading role in the development of economic ties between the two countries.

Turkmenistan's access to Iran’s Chabahar Port via a railroad providing the Central Asian country with access to the high seas was highlighted. The settlement of Iran’s gas debt to Turkmenistan was also addressed, with Bazrpash noting that the remaining debt would be settled through bartering with the construction of the Kum Dagh-Incheh Borun Road.

The two countries further signed memoranda of understanding in the fields of veterinary medicine, agriculture, electricity, power transmission lines, and the export of electricity equipment and construction materials from Iran to Turkmenistan.

At the proposal of the Iranian side, the 18th edition of the Iran-Turkmenistan Joint Economic Cooperation Commission is scheduled to be held in Tehran in September 2024.

Turkmen President Serdar Berdimuhamedow discussed the prospects for developing cooperation between the two countries in a meeting with the Iranian road minister on the sidelines of the November 17-18 meeting of the Turkmen-Iranian commission.

Both sides emphasized the special place given to trade and economic contacts on the agenda of interstate partnership, highlighting energy, transport, communications, construction, and agriculture as “key areas of cooperation.” They expressed confidence that relations between Ashgabat and Tehran will continue to be based on “the principles of equality, mutual benefit, and long-term commitment.”

In a letter addressed to participants of the specialized Iranian exhibition and the Turkmen-Iranian business forum on November 17, President Berdimuhamedow called for an increase in his country's trade with Iran.

"I urge the participants of the specialized exhibition 'Iran Project' and the Turkmen-Iranian business forum to increase the volume of bilateral trade, to establish new forms of cooperation and to implement joint projects in promising areas," Berdimuhamedow said.

A business forum aimed at boosting trade, which grew to $487 million in 2022, representing a 32% increase from 2021. Trade is expected to reach $600 million by the end of 2023. Notably, the main areas of cooperation between Iran and Turkmenistan include fuel, energy, transport, communications, construction, and agriculture.