Russia and Iran reach accord on financing power plant construction

Russia and Iran have reached an agreement on the financing of the Bushehr nuclear power plant, which Russia is helping to build in southern Iran. Tehran has agreed to provide financing at $US 20-25 MLN a month.

The head of Russia's Atomic Energy Agency, Sergey Kirienko, says the plant should be completed by the end of 2007.

Tehran has agreed to provide financing at $US 20-25 MLN a month.

Iran has already paid Russia $US 900 MLN for work completed, and expects the power plant will start producing electricity within a year. The Russian side believes there are no technical obstacles, and sees financing as the main issue.

The total deal is estimated at $US 1.3-1.4 BLN.

Moscow plans to supply the station with a few hundred tons of low-enriched uranium next March. This has produced a lot of concern around the world as it's possible to extract plutonium from used fuel and utilize it for nuclear warheads.

However, Russian officials are confident the fuel deliveries will not pose any threat to non-proliferation because Russia and Iran are bound by agreement for Tehran to return used fuel to Russia.