Russia has agreed to help Venezuela build its first nuclear power station, in a move that is likely to raise concerns in Washington about the increasingly close co-operation between Moscow and Caracas.

President Dmitry Medvedev announced the move at the end of a two-day visit to Moscow by Venezuela's president, Hugo Chávez. Venezuela's economy is overwhelmingly reliant on oil and Chávez has said he wants the nuclear power station to diversify energy supply.

A senior US administration spokesman said the White House was not planning to respond. A state department spokesman, PJ Crowley, said this week that there were no specific concerns about Venezuela's nuclear ambitions. "Certainly nothing that rivals Iran," he said.

The official US position is that it is not opposed to civilian nuclear technology, only to the proliferation of nuclear weapons programmes.

Medvedev implicitly acknowledged the deal was not likely to be popular with the US administration but defended Venezuela's right to seek access to peaceful nuclear technology. The station is likely to be built over the next 10-15 years. Its cost has not yet been revealed.

"An agreement has just been signed on co-operation in the atomic sphere. I don't know who will shudder at this," Medvedev said, speaking at a press conference following talks with Chávez. He added: "The president [of Venezuela] said there will be countries in which this will provoke different emotions. But I want to say especially that our intentions are absolutely pure and open." Russia wanted Venezuela to have a "full range of energy choices," he said.

Chávez's visit is his ninth to Moscow and is the first stop on a 12-day European tour that includes Belarus and, for the first time, Ukraine – now once again within Moscow's sphere of influence.

On previous occasions Chávez has bought billions of dollars worth of military hardware from Russia including submarines, helicopters and attack aircraft. Both leaders today reaffirmed their plans to continue co-operating on technical and military issues.

Viktor Semyonov, an economist at Moscow's Institute of Latin American Studies, said it was logical for Venezuela to seek civilian nuclear technology since its economy was even more dependent on oil than Russia's. Russia is already building a nuclear power station in Iran, and is also holding talks with other Latin American countries including Brazil and Argentina, he pointed out.

"We are a country that exports nuclear technology around the world. Venezuela's economy is 94 or even 95% made up of oil. Russia's is 65%, which is already a lot. They [the Venezuelans] want to widen their sources of energy so they are less dependent on it."

Sergei Kirienko, the head of Rosatom, Russia's state nuclear corporation, said that Russia could build a VVER — or pressurised water reactor — for the Chávez regime. "It could be in 10 years. It could be earlier," he said. Kirienko said practical nuclear co-operation would start soon, including "training staff for Venezuela's nascent atomic sector" and help with drawing up new legislation in line with International Atomic Energy Agency rules.

Russia would also carry out "geological prospecting" to study the possibility of extracting natural uranium inside Venezuela, he said.

Speaking in Moscow on Thursday night, Chávez offered assurances that Venezuela had no interest in building a nuclear bomb, and only wanted to pursue peaceful nuclear technology. He also described the collapse of the Soviet Union as a "catastrophe" and launched a familiar attack on the United States, denigrating it as a "Yankee empire".

Chávez went for a spin in a Lada car, causing miles of gridlock on Moscow's already traffic-clogged streets. Before heading to the airport, he handed Medvedev several gifts. They included three bars of chocolate, some banana jam and a tin of cocoa.

Russia's prime minister, Vladimir Putin, travelled to Caracas in April, signing a preliminary agreement on civilian nuclear co-operation.