Vietnam, Russia sign deal on first nuclear plant

Vietnam, Russia sign deal on first nuclear plant

Hanoi: Russia and Vietnam on Sunday signed a deal, worth an estimated $5.6 billion, for the energy-hungry Southeast Asian country’s first nuclear power plant.

Russian President Dmitry Medvedev witnessed the signing, part of an effort to boost ties with his country’s former Soviet-era communist ally.

An official with Russian state nuclear conglomerate Rosatom said the construction of a two-reactor plant is estimated at more than €4billion.

Rosatom chief Sergei Kiriyenko, also in Hanoi, declined to confirm the cost. Vietnam wants to build eight nuclear facilities in the next two decades. Initial government plans call for four reactors, with a total capacity of 4,000 MW and at least one of them operational from 2020.

Kirieynko said that timeframe was “absolutely realistic".

Medvedev earlier held talks with Vietnamese officials centred on expanding his country’s presence in the country which he said is “actively developing" on various fronts.

“On all these directions Russia will assist Vietnam, which is our close friend," he said after paying his respects at the mausoleum of Vietnam’s revolutionary hero Ho Chi Minh.

Russia is locked in a global race with competitors like the US, Japan and France to clinch lucrative worldwide contracts as demand for nuclear energy increases.

Japan’s Prime Minister Naoto Kan, also on a visit to Hanoi, announced with his Vietnamese counterpart that Japan will be a “partner" to build two other nuclear reactors.

The move makes it highly likely that Japanese companies will get the country’s second nuclear contract, a senior Japanese official said.

Fast-growing Vietnam faces energy shortages, and foreign businesses have expressed concern about a lack of energy and other infrastructure.

Moscow is willing to provide a loan to help finance the Russian plant’s construction, Medvedev’s top foreign policy aide Sergei Prikhodko said at the Kremlin in comments released Friday.

“Such a large project as the construction of a nuclear power station naturally prompts our friends to make use of our financial resources," he said.

Ties with Vietnam date back to the Soviet era when the communist Soviet Union became the country’s main benefactor after the Vietnam War ended in 1975.

Following the Soviet collapse in 1991 Vietnam was left without the Soviet Union’s ideological, economic and military support, and ties have long remained only a shadow of Cold War levels.