Although South Korea’s government said it would not help to fund the project to build new units at the Dukovany and Temelin NPPs in the Czech Republic, Hankyoreh reported that newly uncovered documents suggest it was considering loans for the construction.
In July, a South Korean consortium led by the state-run Korea Hydro & Nuclear Power (KHNP) was selected as the preferred bidder for the construction of up to four NPP units in the Czech Republic. The other contender was France’s EDF. US-based Westinghouse Electric had been excluded from the tender in January, because it “did not meet the necessary conditions”.
According to Hankyoreh KHNP submitted a letter of interest during bidding for the project that indicated the availability of financial assistance. It implied that the Czech government could receive loans for three planned nuclear reactors contradicting government statements.
According to a document titled Nuclear Power Plant Project unit Dukovany 6 & Temelin 3/4 Project in the Czech Republic, KHNP had received letters of interest from the Export-Import Bank of Korea (Korea Eximbank) and the Korea Trade Insurance Corporation (K-SURE) on 4 April stating that the two organisations would “consider financing the above Project where KHNP is preparing to bid”.
Hankyoreh said it had obtained the document via the office of Cha Gyu-geun, a lawmaker with the Rebuilding Korea Party.
The document reportedly describes loans not only for Dukovany 6 but also for Temelin units 3&4, which would represent a separate project. The Czech government had originally sought to build four nuclear reactors but only received approval from the European Commission for a funding plan for one (Dukovany 5). EU member states require approval from the European Commission before building power plants.
In July, KHNP was only selected as the preferred bidder for the two Dukovany reactors. The KHNP document expresses willingness to provide loans for the other three reactors, for which Prague has yet to arrange funding.
The cost of building two nuclear reactors at the Dukovany plant is €15bn ($15.74bn), or 17.3% of the Czech government’s total budget. “Given the fiscal state of the Czech government, there was never any chance of it raising the money for a large nuclear plant… on its own,” Seok Gwang-ho, an adviser for the Energy Transition Forum, told Hankyoreh. “If Korea agrees to provide low-interest loans for building the other three reactors or consents to penalties for construction delays as conditions for signing the deal, Korea’s profit from the project will decrease considerably.”
The Korean government has said the Czech government will raise its own funds for the project. “What I’m hearing is that [construction of the nuclear reactors] will be entirely funded by the Czech government, and that Korea won’t be providing financing,” Minister of Trade, Industry & Energy Ahn Duk-geun told a press conference after KHNP was selected as the preferred bidder in July.
Hankyoreh said KHNP declined to answer questions about whether and why letters of interest about financial assistance had been issued, noting that “this matter concerns a contract between two countries”.
The K-SURE acknowledged issuing a letter of interest. “The Czech government hasn’t asked for financial assistance yet, but if we do receive such a request, we’ll review it and then decide whether to provide assistance,” a spokesperson said.
In response to media reports about the proposed funding, the Ministry of Trade, Industry & Energy and the Korea Eximbank issued a statement.
“The documentation that KHNP provided during the bidding process was a ‘non-binding letter of interest’ noting that financing could be looked into, and was not a commitment to financial provisions” the release said, describing the document a “customary” part of the bidding process for major projects.
It went on to state that because the Czech government announced plans to raise its own funds to cover construction costs following KHNP’s selection as the preferred bidder, the administration had said that there had been no agreements as to financing and that no requests for cooperation on financing had been made by the Czech side. The statement stressed that there had been “no secret promise for financing behind the open statements that [Korea] would not provide financing”.
Hankyoreh, however,said the reported financing offer “is likely to arouse controversy about the economic viability of a project … which is both built by and funded by Korea”.
Researched and written by Judith Perera
