Russia to finance Venezuela's submarine deal: newspaper

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Moscow, Apr 4 (UNI) Russia and Venezuela are conducting talks on granting a loan of about 800 million dollars to partially finance the purchase of four Kilo-class Project 636 diesel submarines, a leading business daily reported today.

The terms of the deal, estimated at one billion dollars, were negotiated late last year, Russian newspaper Kommersant said.

Venezuelan President Hugo Chavez is expected to sign a contract for the submarines during his visit to Moscow to attend the inauguration of President-elect Dmitry Medvedev on May 7.

The neswpaper reported that Russian Deputy Finance Minister Dmitry Pankin had confirmed the loan deal. However, he refused to disclose any details.

A Venezuelan diplomatic source earlier said the loan would be provided by Russia's Vneshekonombank, the paper said.

The submarines will be built at the Admiralty Wharfs in St Petersburg and the Amur Shipbuilding Plant in Russia's Far East.

The Project 636 submarine is designed for anti-submarine warfare and anti-surface-ship warfare, and also for general reconnaissance and patrol missions. It is considered to be one of the quietest diesel submarines in the world.

Kommersant also said negotiations were underway on the purchase of 12 Il-76 Candid military transport aircraft for the Venezuelan Air Force. With the addition of the aircraft contract, the price of the whole deal may reach 1.5 billion dollars.

UNI XC RJ PM1850

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