UAE aims for first Gulf nuclear reactor in 2017

ABU DHABI (Reuters) - The United Arab Emirates aims to have a nuclear reactor -- the first in the Gulf Arab states -- in commercial operation in 2017 as part of a $40 billion atomic energy program, a top official said on Sunday.

"Today we are in the advanced stage of evaluation before moving into the implementation stage and so far it is positive," Hamad Al Kaabi, the Gulf Arab state's representative to the International Atomic Energy Agency (IAEA), told reporters.

"Plans are on track for the first reactor to be commercially operational in 2017," Kaabi said.

He said the world's third-largest oil producer had also set up a Federal Authority of Nuclear Regulation, with former IAEA technical adviser William Travers as director-general, to promote safety, security and radiological protection.

The UAE has already pledged to buy the fuel it needs, in order to avoid having to carry out its own enrichment of uranium, the fuel for nuclear power plants, which if further refined can be used to make bombs.

Western concerns about diversion of enriched uranium for possible bomb-making are at the heart of an international dispute over Iran's nuclear program. Iran, across the Gulf from the UAE, denies pursuing atomic weapons.

Record oil revenues have driven an economic boom that has strained domestic power grids in the UAE. To keep the export cash coming in, Abu Dhabi is looking to nuclear energy to help cap fuel burned for power at home.

The UAE anticipates its electricity needs will rise to 40 gigawatts in 2020 from 15.5 GW in 2008, the Eurasia Group consultancy said.

The planned facility will likely provide about 3 percent of power supply to the domestic market by 2020 with the start-up of about 1 GW of nuclear power, rising to about 15 percent by 2025, consultancy Wood Mackenzie said.

Kaabi declined to provide details on when contracts would be awarded or how many reactors would be built, saying this came under the purview of the Emirates Nuclear Energy Corp (ENEC), the body responsible for building the plant.

(Reporting by Stanley Carvalho, editing by Mark Trevelyan)