Iran Completes Controversial Hydropower Project on Aras River

Publication: Eurasia Daily Monitor Volume: 17 Issue: 91

Khudafarin dam, built by Iran in the occupied Azerbaijani district of Jabrayil (Source: Wikimedia Commons)

In early May 2020, media reports highlighted the construction of a large hydropower system composed of the Khudafarin and Qiz Qalasi (Maiden Tower) hydropower plants as well as hydro junctions and related facilities and bridges on the Aras River, which follows part of the border between Azerbaijan and Iran. The reporting included photographs of the construction sites apparently located on the territory of Azerbaijan’s Armenian-occupied Jabrayil district. The revelation triggered anti-Iran outrage in Azerbaijan. But soon thereafter it became clear that the Azerbaijani authorities had, in fact, given full consent to this activity by signing and ratifying a project agreement with Tehran in 2016. The public in the South Caucasus country nonetheless clearly had little if any awareness of this deal when it was struck, even though details were made available then and can still can be found on the Internet (,, May 7;, February 28, 2019;, June 24, 2016). Some members of parliament (MP) lashed out against Iran’s construction of bridges on Azerbaijani territory; though, those same MPs were silent when ratification of the deal came up for debate in the legislature. Their argument is that the bilateral agreement says nothing about the construction of bridges and, therefore, constitutes a violation. But Azerbaijan’s deputy foreign minister rejected that overly literal interpretation, arguing that the construction of bridges is an integral part of the wider project and, thus, fully in accordance with the agreement (,, May 7, 9).

The public, including individuals loyal to the ruling government, were shocked by news of the completed construction because Heydar Aliyev—one of the most influential figures in all of Azerbaijan’s history and the father and mentor of current President Ilham Aliyev—explicitly rejected the Iranian delegation’s proposal to implement the project two decades earlier, while he was chief executive. The elder Aliyev had set firm conditions requiring, first, the de-occupation of the Azerbaijani territories before acceding to the Iranians starting the project in Jabrayil, and he made a show of cutting off the negotiations while TV cameras rolled. In 2007, however, Tehran secured a 10-kilometer security zone around the project site, guarded by the Iranian forces, from where Armenian forces were withdrawn (, Kavkazsky Uzel,, May 6, 7, 19). And de facto, construction started long before Iran obtained the final consent from Azerbaijan (, January 5, 2016; Financial Tribune, March 16, 2015;, October 24, 2014;, December 13, 2009). As such, the 2016 agreement is formally titled a “continuation” of the construction. Tehran, nonetheless, pursued formal consent from Baku to legitimize the project as well as to prevent a deterioration of relations with the government and avoid further spoiling its reputation among Azerbaijan’s Shiite-majority population.

The context of the 2016 agreement is complex. Therefore, it should not be viewed as a single event but rather as part of a wider bilateral diplomatic process. First, Azerbaijan, alongside Iran and Russia, has been developing the North-South Transport Corridor (NSTC). Thus, Baku pushed Tehran to scupper plans for building an Armenian-Iranian rail link known as the Southern Armenian Railway, which was intended to be a major part of the NSTC. That left Armenia outside this major regional transport corridor. For Azerbaijan, the NSTC’s comparative advantage far outweighed the downsides of permitting Iran to build the hydropower system on occupied territory (see EDM, November 9, 2017).

Second, on March 28, 2018, Tehran and Baku achieved a breakthrough deal on the settlement of long-disputed hydrocarbon fields in the Caspian Sea (see EDM, April 5, 2018). Relatedly, Azerbaijan and Iran (along with Russia, Kazakhstan and Turkmenistan) signed the Convention on the Legal Status of the Caspian Sea, on August 12, 2018, after a quarter-century of protracted negotiations (, September 5, 2018).

Last but not least, the signing, parliamentary ratification and presidential approval of the agreement on the hydropower project in Jabrayil occurred at a sensitive time for Baku. Namely, in late 2015, Azerbaijani law enforcement bodies conducted an operation in Nardaran, a village suburb of the capital of Baku, to eliminate a hub of Shia Islamists accused of various criminal charges. The individuals had alleged links to Iran; yet, Tehran’s reaction was conspicuously restrained. Then-speaker of the Iranian parliament, Ali Larijani, stated that “this [the Nardaran operation] is an internal affair of Azerbaijan” (,, December 1, 27, 2015).  Furthermore, Azerbaijan liberated a slice of land close to the construction zone during the April 2016 clashes with Armenian forces, which came to be known as the Four Days War. In particular, the de-occupied Lele Tepe height enables the Azerbaijani military to more easily control a number of adjacent areas (, April 2, 2019;, April, 11, 2016). And though arguably most visible, these do not make up an exhaustive list of all the major factors that have shaped the context of the relationship between Baku and Tehran over the past several years (see EDM January 30, 2017, October 2, 2017, May 14, 2018, January 28, 2020).

Meanwhile, the hydropower construction project is a practical and diplomatic victory for Iran and serves practical Iranian interests such as providing it with water and electricity supplies from across the border. Additionally, the bridges on the Aras River could represent strong leverage for Tehran in its dealings with Yerevan or Stepanakert (, May 11, 2020; Regnum, March 7, 2019). Interestingly, the Armenian media has kept mum on the matter (, May 7). One reason may be that the wording of the Iranian-Azerbaijani agreement represents a big source of discomfort for the Armenian side. Illustratively, it states that Iran will be in charge of the protection, maintenance and operation of the hydropower plants and related facilities in occupied Jabrayil “until the territorial integrity of Azerbaijan is restored in accordance with the requirements of the [United Nations] resolutions” on the conflict between Armenia and Azerbaijan (, June 24, 2016).

In this light, Azerbaijani officials hail the agreement as a foreign policy achievement while having kept largely mute on claims that the newly constructed bridges could be used as a transportation route for Armenian forces in the occupied territory (, May 7). This concern was, indeed, exacerbated by the April media footage that allegedly showed Iranian fuel trucks driving in Karabakh. Officials in Tehran refuted those reports (,, April 16, 17;, June 8). Nonetheless, aside from Iran’s verbal assurances, no effective mechanism or guarantee is in place to ensure that the Aras River bridges will not be used for purposes other than those established in the bilateral agreement.