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Vietnam, Russia sign deal on first nuclear plant

31 października, 2010

Russia and Vietnam on Sunday signed a deal worth an estimated 5.6 billion dollars 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.

"This is a very important project," he told reporters after the ceremony.

An official with Russian state nuclear conglomerate Rosatom has told AFP the construction cost of a two-reactor plant is estimated at more than four billion euros. Rosatom chief Sergei Kiriyenko, also in Hanoi, declined to confirm the figure.

"The fact that we are the first to start gives us a good competitive advantage," Kiriyenko said, adding Russia will be keen to win more deals at a later stage.

"The capacity that we have agreed upon today is two reactors."

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 megawatts and at least one of them operational in 10 years\' time.

Kiriyenko said a 2020 timeframe for the Russian plant was "absolutely realistic".

Medvedev earlier held talks with Vietnamese officials centred on expanding his country\'s presence in Vietnam, 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 United States, 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 the two countries will join forces 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.

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.

Medvedev said their shared history was a firm foundation to build upon.

"This seals our partnership. The documents here are of secondary importance," he said.

Following the Soviet collapse in 1991 Vietnam was left without its ideological, economic and military benefactor, and links have long been just a shadow of those during the Cold War.

According to the Kremlin, Russia is only the 25th-largest investor in Vietnam.

Vietnamese President President Nguyen Minh Triet said his country was grateful "for all the assistance that Russia rendered in the past", and expressed the hope that investment cooperation would intensify.

The two sides signed additional agreements on construction of a hydro power station and cooperation in the oil sector.

Vietnam and Russia had also been expected to express political support for plans by BP\'s Russian joint venture, TNK-BP, to acquire the Vietnamese assets of British Petroleum.

But Russian Energy Minister Sergei Shmatko said that memorandum had not yet been finalised.

No arms deals were to be signed during the visit, the chief of Russian state arms exporter Rosoboronexport told AFP.

In July, reports said Russia had signed agreements to sell 20 Sukhoi fighter planes to Vietnam. This followed a contract signed in December for Vietnam to buy Russian submarines.

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