India and the Russian Federation today signed a protocol for funding two new units at the Kudankulam Nuclear Power Project in Tamil Nadu.
Russia will extend an export credit of $3,400 million to Russian organisations to help build the units.
The credit will comprise 85 per cent of the value of works, supplies and services to be provided by them.
Mr A.P. Joshi, Special Secretary, Department of Atomic Energy, and Mr S.A. Storchak, Deputy Minister of Finance of the Russian Federation, signed the protocol.
It also has provisions for a State export credit amounting to $800 million for financing up to 85 per cent nuclear fuel control assemblies for the Kudankulam Power Project’s unit 3&4.
The credit carries an interest of four per cent a year. The project credit is payable in 14 years.
The total estimated cost of the project is Rs 32,000 crore. Out of this, Rs 17,000 crore is expected to be met through the Russian State credit.
The repayment will commence one year after commissioning of the project while the fuel credit would be payable in four year and repayment commences after two years of receipt, a release from the Department of Atomic Energy said.
In Kudankulam, the Russians have been helping in the setting up of two, 1000 MW VVER type nuclear power reactors. The unit 1 is expected to be commissioned shortly, while the second unit will take another seven months.
In recent months, the project was the centre of a controversy over environmental issues.
The Kudankulam project is part of a comprehensive Inter-governmental agreement signed between India and the erstwhile USSR in 1988 for cooperation in areas of peaceful uses of atomic energy.
A fresh inter-governmental agreement was signed between India and the Russian Federation in December 2008.
This provided for construction of four more nuclear power units at the existing site at Kudankulam.