UAE says to explore nuclear energy for electricity

By Lin Noueihed

DUBAI, March 24 (Reuters) - The United Arab Emirates says it will establish a $100 million agency to look into developing nuclear energy to satisfy rising electricity demand in the Gulf oil exporter on Iran's doorstep. "Analysis of future domestic electricity demand ... has concluded that peaceful nuclear power generation represents an environmentally promising and commercially competitive option which could make a significant contribution to the UAE's economy and future energy security," a government statement carried by the official WAM news agency said.

"The UAE intends to establish a Nuclear Energy Implementation Organisation ... and is proceeding to evaluate the establishment of a peaceful nuclear programme."

Gulf Arab states -- among the world's largest oil and gas producers -- are considering nuclear power as they look to meet escalating domestic electricity demand without burning more fuel and eating into record export revenues.

The UAE signed a deal with France during President Nicolas Sarkozy's visit in January, agreeing to cooperate on a peaceful nuclear programme.

Sarkozy, who had already signed civilian nuclear deals with Arab oil producers Algeria and Libya, has made no secret of his view that Muslim and Arab states have a right to atomic power.

The UAE, a close U.S. ally, lies across a short stretch of Gulf water from Iran, which is facing international pressure to halt its nuclear enrichment programme.

The Islamic Republic says its nuclear programme is also aimed at generating electricity but the United States and other Western powers say it plans to build atomic weapons.

Unlike Iran, a memorandum on UAE nuclear energy policy issued after a cabinet meeting on Sunday, said the UAE would not enrich uranium itself but import nuclear fuel for its plants, easing any fears about the purpose of its plan.