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U.S. Reaches Deal to Provide Vietnam Civilian Nuclear Power

The U.S. reached an agreement to sell nuclear fuel and technology to Vietnam in a move aimed at boosting its former adversary’s civilian nuclear program while curbing proliferation of atomic weapons.

The agreement was initialed by U.S. Secretary of State John Kerry and Vietnam Foreign Minister Pham Binh Minh on the sidelines of an East Asia summit in Brunei today. It prohibits Vietnam from enriching or reprocessing plutonium or uranium while developing nuclear energy, according to a U.S. administration official who asked not to be identified, citing government policy.

The deal reflects warmer ties nearly 40 years since the end of the Vietnam War as the Obama administration counters China’s rising influence with a strategic rebalance toward Asia. The U.S. has also made nuclear nonproliferation a priority as it seeks to rein in atomic programs in Iran and North Korea.

“As we have seen in North Korea and Syria, the violation of the international nonproliferation regime breeds instability,” Kerry said in Brunei today. “We are working with partners around the world to reinforce the system of rules and norms that prevents the use and proliferation of these heinous weapons.”

Vietnam has contracts with Russia to build two nuclear power plants and with Japan for two more, according to the official. Under today’s agreement, U.S. companies will be allowed to export nuclear-related fuel, expertise, reactors and equipment for the Japanese plants or any future power plants Vietnam may need, the official said.

Modern Technology

“It will open up opportunities for Vietnam to have the best and most modern technology,” Tran Chi Thanh, Hanoi-based head of the Vietnam Atomic Energy Institute, said by phone today. “One key issues is that we must train personnel. The agreement will hopefully give us opportunities to do so.”

The deal, which took more than a year to negotiate, is subject to a 90-day Congressional review once President Barack Obama signs it. Kerry said Vietnam’s nuclear power market is expected to grow to $50 billion in 2030 from $10 billion today.

“This agreement will create numerous opportunities for our businesses between our two countries,” Kerry said during a meeting with Vietnam Prime Minister Nguyen Tan Dung. “Vietnam has the second-largest market, after China, for nuclear power in East Asia, and our companies can now compete.”

Vietnam has said it plans to build as many as 13 nuclear power stations with a capacity totaling 16,000 megawatts over the next two decades. Russia agreed in 2010 to build two reactors in Vietnam by 2020, while Vietnam also agreed the same year to make Japan a partner in building nuclear plants.

To contact the reporters on this story: Indira A.R. Lakshmanan in Bandar Seri Begawan, Brunei at

ilakshmanan@bloomberg.net; David Lerman in Washington at dlerman1@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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