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. Last Updated: 07/27/2016

Nuclear Sector Ready for Market Reform

President Vladimir Putin said Friday that the country's nuclear energy reforms were "close to completion," signaling that the Kremlin would soon put forward long-awaited legislation to modernize the industry into a market-driven corporation.

The move could open the atomic sector to private investments as a way to fund the ambitious program to build 40 nuclear reactors inside the country and 60 abroad by 2030.

"The government has been given the task of preparing the program to support both the nuclear arms complex and the nuclear-energy industry," said Putin, who was chairing a meeting of top atomic-industry officials for the first time.

"This work is close to completion, and at present it is important to make sure it is carried out efficiently," Putin said, according to a record of the meeting on the Federal Atomic Energy Agency's web site.

Agency chief Sergei Kiriyenko has said about $60 billion will be needed to build the 40 domestic reactors. Since his appointment last December, Kiriyenko has sought to transform the nuclear-energy sector into a vertically integrated corporation, with all of its enterprises and institutes incorporated.

"In the world today, there is a consolidation of efforts" in the nuclear sector, Kiriyenko said at Friday's meeting. "Therefore we need new management systems that allow us not only to compete but to win."

The nuclear program is aimed at boosting Russia's reliance on nuclear power from 16 percent of the country's electricity supply to 25 percent by 2030. Unless new nuclear reactors are built, nuclear energy's share will fall to 1 percent or 2 percent of the overall energy balance, Putin said Friday, reiterating past statements.

Beginning this year, Russia will look to build two reactors annually, speeding up to three reactors per year in 2009 and four per year by 2015.

Part of the program's success relies on the nuclear sector having secure contracts and possibly control over atomic machine-building plants and reviving industrial construction enterprises. Kiriyenko said Friday that there was progress in both areas, as well as on safety and anti-terrorism measures.

In the last two months, the state has brought several machine-building assets, including Yekaterinburg-based United Heavy Machinery, under state control.

Analysts said they saw Putin's words as a confirmation that the sector's restructuring would not be dragged out for years, as has happened with state electricity monopoly Unified Energy Systems.

"The message is clear that Putin wants to see the sector restructuring plan completed and approved by the State Duma, perhaps before the Group of Eight summit next month," said Erik DePoy, a strategist with Alfa Bank.

"From an investment standpoint, we will be looking for details on the new business model for [fuel monopoly] TVEL," which has been tapped as the possible basis for a holding company to manage the nuclear power sector's assets, DePoy said.

The meeting was also attended by military officials, including Defense Minister Sergei Ivanov and other members of the top brass. Putin said the atomic-industry reforms would be vital in maintaining Russia's military nuclear strength.