November 23, 2010 / 8:40 PM / 9 years ago

UPDATE 2-Libya says Ukraine farm lease deal to go ahead

* Deal to lease 100,000 hectares was signed last year

* Agreement stalled after change of government in Ukraine

* Libya says Ukraine to help it with nuclear energy (Updates with further comments from al-Mahmoudi, paragraphs 5-10)

By Ali Shuaib and Salah Sarrar

TRIPOLI, Nov 23 (Reuters) - A stalled deal under which Libya agreed to lease 100,000 hectares of farmland in ex-Soviet Ukraine will now be implemented, Libya’s prime minister said on Tuesday after meeting his Ukrainian counterpart.

Ukraine also agreed to use its expertise in civilian nuclear technology to help Libya develop a nuclear energy capacity, Prime Minister Al-Baghdadi Ali al-Mahmoudi told a news conference after talks with Ukraine’s Mykola Azarov.

The farmland lease deal was brokered last year, but since then there was a change of government in Ukraine. A Libyan official said earlier this year the deal was on hold because conditions were not right for it to go ahead.

By pursuing the lease deal with Ukraine, oil exporter Libya joined an international trend — driven by high global food prices — for countries with plenty of cash but little farmland to lease land overseas.

“The implementation of this agreement was delayed but today we talked frankly and agreed that, within a period not longer than six months, we will deal with all the problems and start the programme,” al-Mahmoudi said.

On nuclear energy cooperation, he said: “Ukraine has experience and they are going to help us in this sector ... We agreed to start in this field immediately, especially in the area of training.”

Until six years ago, Libya was subject to international sanctions over banned weapons programmes it has since renounced. It says it wants nuclear reactors to generate electricity and power water desalination plants.

On oil and gas, the Libyan prime minister said previous agreements to give Ukrainian firms exploration concessions in Libya had not been implemented.

But he said Libya, home to Africa’s largest proven oil reserves, was prepared to discuss new energy projects involving Ukrainian companies.

He also said Ukrainian construction and engineering firms would have a share of lucrative contracts Libya is handing out to foreign companies to upgrade its transport system, utilities and public buildings. (Writing by Christian Lowe; Editing by David Gregorio)

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