Kuwait and France agree nuclear deal

Kuwait and France have agreed €600 million deal for the emirate's sovereign wealth fund to acquire 4.8 per cent of Areva, the French government's nuclear flagship.

Kuwait and France have agreed a €600 million (Dh2.9 billion) deal for the emirate's sovereign wealth fund to acquire 4.8 per cent of Areva, the French government's nuclear flagship.

The agreement, sealed last week, will see the Kuwait Investment Authority supply two-thirds of the €900m strategic capital injection Paris has sought for the designer of its nuclear reactors.

The French government, which will hold 88.2 per cent of Areva after the deal closes, is to provide the remaining capital.

For Kuwait, the development could boost the emirate's plans for civil nuclear development as it strives to reduce its dependence on oil and gas for power generation. It currently burns oil to supply about 70 per cent of its electricity needs - the highest proportion for any Gulf oil exporter except Iraq.

Gas fuels its remaining power generation.

Along with all its fellow members of the GCC, Kuwait is turning to nuclear power in the hope of keeping its surging population adequately supplied with electricity and desalinated water as it pursues an ambitious programme of economic expansion and diversification.

Adding nuclear power to the GCC energy mix would also help the region maximise revenues from oil exports and petrochemicals production.

Last year, in a blow to French aspirations to lead a nuclear renaissance in Europe and emerging economies, a consortium led by Areva failed to win a US$20bn (Dh73.46bn) contract to develop the UAE's first nuclear reactors.

A rival South Korean group submitted the winning bid.

Paris is now pursuing opportunities for closer nuclear ties with other Gulf states.

Kuwait was the second government in the region France approached to seek funds for Areva.

Talks with Qatar foundered over that emirate's demand for a stake in the French company's uranium mining operations.