Iranian Energy Minister Majid Namjou said construction started this week on a hydroelectric power plant on the Aras River, which flows along the border separating the two countries.
When completed, the project would supply 1,700 megawatts of power per year for Iran, reports state-funded broadcaster Press TV. The project consists of two units designated for each country and was funded jointly. The Iranian broadcaster didn't provide a construction timeline.
Armenian Energy Minister Armen Movsisyan was quoted by Russia's state-run news agency RIA Novosti as saying the former Soviet republic was discussing the construction of a pipeline to carry gasoline and diesel from Iranian refineries.
"I'll see together with Namjou that the implementation of these two major programs currently at the stage of working discussions begins as soon as possible," Movsisyan said. "The implementation of these two projects will raise the level of economic cooperation between the two countries."
The pipeline should be completed in 2014.