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Iran's Bushehr nuclear power plant.
Moscow and Tehran have signed two contracts under which Russia will build as many as eight nuclear power plants in Iran.
One contract says two reactors will be built at the Bushehr nuclear power plant on Iran's Persian Gulf coast, the Russian nuclear energy company Rosatom said. Under a second contract, two more units eventually may be built at Bushehr and perhaps four more at sites that haven't yet been selected. All construction would be monitored by the UN's International Atomic Energy Agency (IAEA).
Rosatom's statement said all the plants would be under the same constraints as Bushehr is today. The IAEA has mandated that all nuclear fuel at the plant be produced in Russia and returned there for reprocessing after it is spent to ensure that the material can't be diverted for a weapons program.
Russia didn't give a timetable for any of the construction, but AEOI Spokesman Behrouz Kamalvandi said construction of the first two plants would begin in the current Iranian year, which ends March 20, 2015.
At the signing ceremony in Moscow on Nov. 11, Ali Akbar Salehi, the director of the Atomic Energy Organization of Iran (AEOI), and Rosatom CEO Sergei Kiriyenko agreed that the deals would expand relations between their two countries for years.
Russia appears to be following through on its approach to prevent Iran from building nuclear weapons by keeping its nuclear activity under IAEA scrutiny. Under the plan, Moscow requires Iran to buy Russian reactor fuel exclusively, thereby nullifying Tehran's argument that it must be allowed to enrich its own uranium for medical purposes.
Iran, however, is still enriching uranium, a program opposed by most Western countries as well as Israel and Saudi Arabia because it can be used to produce elements needed for nuclear weapons.
Bushehr is Iran's only nuclear power plant. Construction began in 1974 by a German company, but was suspended in 1980, a year after Iran's revolution. In 1992 Moscow agreed to complete the reactor, but only if Russia controlled the supply and disposal of all its nuclear fuel. Rosatom completed construction in 2011 and turned over operational control to Iran in 2013.
At first Washington was leery of Russia's plan to equip Iran with nuclear power plants, but changed its mind, given the IAEA's approval of the program.
Under the Nov. 11 contracts, Russia would share some of its reactor technology with Iran. At least the first two reactors to be built at Bushehr, and perhaps two more, would be built in Russia and exported to Iran. Rosatom said, however, that the remaining four, if they are built, would be constructed in Iran with Russian help. All would be powered with Russian nuclear fuel.
In recent years Russia has been active in building nuclear power plants in developing countries, including India and in many parts of Southeast Asia. This program in part is an effort to convert to civilian use the excess uranium enrichment capacity from the Cold War era.
By Andy Tully of Oilprice.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.