BELARUS NEWS AND ANALYSIS

DATE:

16/03/2011

Russia, Belarus sign $9 billion nuclear plant deal

By YURAS KARMANAU

MINSK, Belarus

Russia will build a $9.4 billion nuclear power plant for Belarus, Russian Prime Minister Vladimir Putin said Tuesday.

Putin oversaw the signing of a deal in Minsk that foresees a two-block facility coming fully online by 2018, and said a contract would be hammered over the next month to provide at least $6 billion of the total required in loans.

The project will likely anchor the smaller neighbor even further to Russia's political orbit.

The announcement came on a day when European Union decided to put its nuclear apply stress tests on its nuclear power stations and Germany said it will switch off seven of its aging reactors, in response to Japan's atomic crisis.

The plant, which is to be constructed on a nature reserve popular with tourists near the Lithuanian border, has been criticized both in the Baltic country and Belarus.

One third of Belarus' territory was contaminated with radioactive fallout from the 1986 Chernobyl disaster, and the threat of another meltdown in Japan has brought back memories for citizens of the former Soviet nation of 10 million, despite promises that the plant will supply 30 percent of their annual energy needs.

Putin said the production of nuclear energy remains an essential source of energy for the developed countries, as he praised the nuclear technology, a lucrative Russian export.

"The safety and trustworthiness of the nuclear power station is the most important thing. Nuclear energy will be developed," Putin said. "Without nuclear energy it is hard to imagine the energy balance in many countries," he said.

Putin said Russia may extend additional loans for Belarus to cover the extra $3.4 billion required for the station's related infrastructure.

Russia has tens of billions of dollars in nuclear power plant contracts with countries around the world. It signed a deal with Bangladesh in February to build its first nuclear plant.

Putin said on Tuesday, Russia was considering a loan of $4 billion to India for the same purpose.

Political opponents of authoritarian Belarus President Alexander Lukashenko argue that he is siding too closely with Russia, and massive financial debts will only increases the country's dependence on Moscow.