Why Do Iran and Azerbaijan Barter Electricity?

Azerbaijan has started to export electricity to Iran, representatives of Azerenerji, the main electricity producer in the Republic of Azerbaijan, was quoted as saying. Earlier, Azerbaijan’s principal electricity producer Azerenergy JSC and Iran’s state energy company Tavanir signed an agreement on the sale of electricity. The agreement was signed after the visit of the Azerbaijani delegation led by Deputy Energy Minister to Iran.

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Azerenerji began to transport 80 MW of electricity to the regions of Mogan and Astara in the northwest of Iran. Bandwidth will be increased to meet the terms of the agreement of the parties. In March of 2018, Tehran agreed to purchase 180 MW from Azerbaijan to prevent the potential shortage of electricity in the northern regions of the Islamic Republic this summer.

Iran-Azerbaijan Relations

The official diplomatic relations between Azerbaijan and Iran were established after the collapse of the Soviet Union. Iran and Azerbaijan share, to a large extent, the identical history, religion and culture. The area of what is now called Azerbaijan was only separated from Iran in the first half of the 19th century, through the Russo-Persian Wars. Additionally, Iran and Azerbaijan are official Shia Muslim nations and thus have the highest and second highest Shia population percentage in the world.

According to the barter deal, Iran exports electricity to Armenia and Azerbaijan in winter and imports it when domestic demand rises in summer. In Baku, Iran, Russia and Azerbaijan discussed the issue of combining the electric networks of the three nations and building the electric power “North-South” corridor. All the three countries agreed to hold the next meeting before the end of this month in Moscow.

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