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. Last Updated: 07/27/2016

Iran's Slow Payment May Delay Nuclear Plant

bloombergA Russian contractor walking near a 1,000-megawatt nuclear power plant reactor in construction at Bushehr in 2005.
Uranium fuel deliveries to a Russian-built nuclear plant in Iran and the reactor's opening could fall behind schedule because of Iran's delays in payment, Russian officials said Monday -- the latest sign of financial disputes dogging the deal at the center of Moscow's nuclear cooperation with Tehran.

But a top nuclear official in Iran on Monday rejected the claims that the Islamic republic had been dragging its feet on payments for the power plant and accused Moscow of trying to delay the project's completion, Iran's official news agency reported.

A Russian government official who asked not be named because he was not authorized to speak to the media said Iran broke the schedule of payments this year under the $1 billion contract to build the Bushehr nuclear plant, adding that Iran blamed the delay on the need to switch from dollars to euros for payments.

Mohammad Saeedi, the deputy head of the Atomic Energy Organization of Iran, denied that Iran had been late making payments.

"Iran has had no delay whatsoever in making payments for the Bushehr nuclear power plant to the Russian ... company," Saeedi was quoted as saying by the IRNA news agency.

Federal Atomic Energy Agency spokesman Sergei Novikov said the delay could derail the startup schedule for reactor.

Last year, Russia agreed to ship fuel to the plant in southern Iran by March 2007 and open the facility in September, with electricity generation to start by November.

"The opening schedule could definitely be affected," Novikov said.

The warning came amid what Russia says are persistent diplomatic efforts to persuade Iran to allay international fears that it could be seeking nuclear weapons by halting uranium enrichment.

But while a delay in opening the Bushehr plant is likely to anger Iran, there was no indication that Russia could be maneuvering to scrap the deal, which has faced Western criticism. Russia emphasizes that Iran has the right to a peaceful nuclear energy program, and President Vladimir Putin and other officials have said repeatedly that Moscow would honor the Bushehr contract.

Putin's increasingly defiant posture toward the United States would make it highly unlikely that the Kremlin would opt out of the agreement, particularly now that U.S. concerns have been eased by an agreement obliging Iran to return spent fuel -- which could potentially be used for a weapons program -- to Russia.

Russian nuclear officials had long complained about Iran failing to pay in time for the construction work at Bushehr.

Sergei Shmatko, the chief of the state-run Atomstroiexport company building the Bushehr plant, said in December that Iran already had paid Russia $900 million for the plant's construction. But he added that his firm had provided a $140 million loan to Iran to finance construction work because the Iranians had been slow to pay.