The commercial operation of the 1,000 MW Bushehr nuclear plant in southern Iran has taken a significant step forward with a controversial fuel supply agreement signed between Russia and Iran.

Under the terms of the agreement Russia will supply Iran with enriched uranium fuel some six months before its first nuclear plant enters service, expected by the end of 2006, although exact details remain confidential. However, the agreement provides that under the auspices of the International Atomic Energy Agency (IAEA), Teheran will send its waste fuel back to Russia, a condition built into the deal as a concession to Western concerns. Tehran initially rejected the clause, but relented after a series of negotiations which further delayed the plant’s commissioning. About 100 tonnes of fuel will be provided to the Russian designed and built plant and the return of spent fuel, to be financed by the Iranians, will occur in around 10 years.

The contract to build the first generating unit of the Bushehr station was signed in 1995 for which Russia is receiving slightly more than $1 billion and heavy equipment, turbines and a generator have already been installed. Rosenergoatom’s Novovoronezh centre has also already trained several hundred specialists for the Bushehr plant and there are reports that about 700 engineers from Iran will be trained before the end of this year. Iranian specialists will be also trained at Russian plants which have the VVER 1,000 water cooled, water moderated reactors of the kind Russian builders are constructing in Bushehr.

Iran temporarily suspended work on enrichment pending negotiations with France, Germany and Britain, but has repeatedly said the freeze is short-term only. Nonetheless, US support for European diplomacy has improved the chances of reaching a negotiated solution to the uranium enrichment programme, said German Chancellor Gerhard Schroeder, a reference to suggestions that President George W. Bush is considering joining European leaders in offering economic incentives to Iran in exchange for abandoning its nuclear fuel programme.