Libya and France sign Airbus deals, nuclear agreement

By Francois Murphy

PARIS (Reuters) - Libya and France signed contracts for the purchase of 21 Airbus aircraft on Monday during the visit of Libyan leader Muammar Gaddafi.

Afriqiyah Airlines signed a contract for six A350 aircraft, and Libyan Airlines signed deals for four A330, seven A320 and four A350 aircraft, an official for French President Nicolas Sarkozy's office said.

Airbus, a unit of EADS, confirmed the orders were the finalization of a memorandum of understanding signed at the Paris Air Show in June. At the time, the Libyan Airlines deal alone was estimated worth some $2 billion at list prices.

Libya and France also prepared a cooperation agreement on the civilian use of nuclear energy and the supply of "one or several" nuclear reactors to desalinate sea water, Sarkozy's office said in a statement.

But an industry source said a concrete order for such a reactor was not set to be signed this week.

The source also said Libya had signed a contract for electricity transmission and distribution with France's Areva, which the source estimated to be worth around 300 million euros ($440 million).

Several contracts had also been signed with French companies Vinci and Veolia Water, Sarkozy's office said, giving no further details.

On the arms sector, the two countries signed a memorandum of cooperation, with Libya committing itself to enter exclusive negotiations with France to acquire equipment in the framework of state-to-state contracts, Sarkozy's office said.

Earlier in the day, Sarkozy said he would sign contracts with Libya worth around 10 billion euros.

Asked about this sum, Sarkozy's diplomatic adviser Jean-David Levitte told reporters: "They're there." He declined any further comment.

(Additional reporting by Marie Maitre and Kerstin Gehmlich, Editing by Matthew Jones)