US President Barack Obama approved a nuclear energy deal with the United Arab Emirates worth potentially billions of dollars to US energy companies, setting the stage for Congress to decide whether to block it.

"I have determined that the performance of the agreement will promote, and will not constitute an unreasonable risk to the common defense and security," said Obama.

The next step in the approval process for the civil nuclear deal is for State Secretary Hillary Clinton to formally submit it to the US Congress. The pact would go into effect after 90 days unless lawmakers vote to block it.

The UAE, which was the world's third largest oil exporter in 2007, is planning to build a number of nuclear reactors to meet an expected need for an additional 40,000 megawatts of electricity by 2017.