Aug. 12 (Bloomberg) -- Russia will spend as much as 16 billion rubles ($487 million) in 2010 to develop its military base in Abkhazia and fortify the border of the separatist Georgian region, Prime Minister Vladimir Putin said today, a year after Russia’s five-day war with Georgia.

Russia recognized Abkhazia as a sovereign country after the war over another breakaway Georgian region, South Ossetia. Russia has deployed thousands of troops in the two regions and agreed to defend their borders.

On a visit to the Abkhaz capital Sukhumi today, the first anniversary of a European Union-brokered cease-fire agreement that brought the fighting to an end, Putin renewed Russia’s pledge to defend Abkhazia against attack and to help the region rebuild its economy.

“The Abkhaz people will succeed in reviving their economy as Russia continues to give systemic economic and political -- and, if needed, military -- support,” Putin told reporters after talks with Abkhaz leader Sergei Bagapsh.

Russia has deployed 1,700 soldiers in Abkhazia and will increase that number to 3,636 by the end of this year when renovations are completed at its military base in the region, Defense Minister Anatoly Serdyukov told reporters, adding that no further troop increase is planned.

‘Illegal’ Entry

The number of Russian military personnel stationed in South Ossetia is slightly smaller, Serdyukov said. Russia has military cooperation agreements with both regions.

Georgian Deputy Foreign Minister Alexander Nalbandov said Putin’s trip to Sukhumi was “illegal,” because Georgian law forbids entry to the region from Russia. Georgia regards Abkhazia and South Ossetia as occupied territories. Apart from Russia, only Nicaragua has recognized the regions’ sovereignty.

“It’s no coincidence that Putin’s visiting today,” Nalbandov said. “It’s a planned provocation aimed at challenging the international community, because the cease-fire agreement was signed one year ago today.”

Georgia and its Western allies, including the U.S., say Russia has failed to meet its obligations under the cease-fire, specifically the requirement in the Aug. 12, 2008, agreement to withdraw its troops to their pre-war positions.

Black Sea Base

Russia insists that it has implemented the cease-fire agreement. In a letter to French President Nicolas Sarkozy, who led the EU’s mediation effort last year, Russian leader Dmitry Medvedev said on Aug. 8 that Russia had “fulfilled its obligations” under the agreement “in full” by last October. Medvedev hailed the cease-fire as the “only ‘code of conduct’ in this part of the Caucasus.”

Eka Tkeshelashvili, head of Georgia’s Security Council, said Russia’s military spending in Abkhazia is aimed at bolstering its military presence on the Black Sea.

“Abkhazia wasn’t chosen for nothing,” Tkeshelashvili said by telephone in the Georgian capital Tbilisi. “We always knew that the Soviet-era base at Gudauta was operational anyway. Now they’re talking again and clearly they have further plans for these bases.”

The town of Gudauta is located on the Black Sea coast a short distance from Sochi, the Russian resort that will host the 2014 Winter Olympics. Bagapsh said in December that Abkhazia plans to benefit from the Olympics construction boom in Sochi by supplying building materials such as road metal, sand and trim stone.

‘Military Outposts’

Nalbandov said Russia’s military buildup in Abkhazia and South Ossetia “proves once more that these territories will be nothing but Russian military outposts.”

Putin said he hopes Abkhazia can achieve a level of prosperity similar to that enjoyed by small countries in Europe such as San Marino and Monaco, which have “special relations” with their neighbors.

“Monaco has a special relationship with France,” Putin said. “So the fact that a special relationship is developing between Russia and Abkhazia is an entirely normal thing.”

Putin said Russia gave Abkhazia about 2.5 billion rubles this year to support the region’s budget and will give “slightly less” in 2010.

Abkhazia requested a loan of as much as 1.5 billion rubles from Russia, Bagapsh said in May. In March, Russia pledged 5.16 billion rubles of economic aid to Abkhazia and South Ossetia to help the regions balance their budgets and meet expenses, such as pensions and state salaries.

To contact the reporters on this story: Lyubov Pronina in Sukhumi at lpronina@bloomberg.net; Helena Bedwell in Tbilisi at hbedwell@bloomberg.net

Last Updated: August 12, 2009 11:57 EDT