The government of Iran and Pakistan signed an electricity exchange agreement on 13 March to increase the volume of the electricity trade by 200 megawatts.

The signing of the agreement took place in Tehran during a ceremony, as Islamabad’s Energy Minister Khurram Dastgir Khan was received by his Iranian counterpart Ali Akbar Mehrabian, both of which signed the agreement on behalf of their countries.

The Iranian energy minister remarked that this joint project was carried out in under nine months, calling it a “unique record,” adding that interconnecting of the neighboring countries’ electrical grids has already been completed.

Mehrabian added that this form of “modern infrastructure” will be fully implemented soon, emphasizing the importance for Iran and Pakistan to bolster energy cooperation. 

He also claims that this agreement will improve the stability of both countries’ infrastructure in relation to maintaining a sustainable electricity supply. 

Tehran’s energy minister also disclosed that “measures such as connecting Iran’s electricity grid to Turkiye, Russia, and other neighboring countries have been taken or are being taken.”

Economic relations between Tehran and Islamabad have improved under Iranian President Ebrahim Raisi’s government, as annual trade between the two countries reached $2 billion.

In August last year, Pakistan’s Minister for Commerce, Naveed Qamar, announced that Iran and Pakistan were set to finalize a Free Trade Agreement (FTA) by early 2023.

Analysts have been calling for an upgrade in Iran-Pakistan relations as an essential requirement to improve the security and development in the region.

Over the past year, Iran bolstered cooperation with regional nations in order to overcome western sanctions. This is the basis of President Ebrahim Raisi’s foreign policy, which shuns previous “look west” policies that have “caused an imbalance in the country.”

“We must pay close attention to all countries, particularly our neighbors,” Raisi said during a speech commemorating the 43rd anniversary of the Islamic Revolution in February last year.