Korea moves step closer to winning $29 bn nuclear power plant project in Poland

[Photo by Yonhap]

Korea Hydro & Nuclear Power signed a letter of intent with Poland’s Ze Pak and PGE to jointly build a nuclear power plant using South Korea’s APR1400 technology, a project that is estimated to be worth more than 42 trillion won ($29 billion).

The three companies aim to sign a definitive contract a year later after they conduct analysis on geotechnical, seismic and environmental conditions, develop an estimated budget for preparatory work, project financing plans and come up with other details of the project that will be built at a site in Patnow, about 240 kilometers west of Warsaw.

A preliminary plan is expected to be available by the end of this year, according to a statement from the Ministry of Trade, Industry and Energy.

Once they sign on a final contract, the deal would be the first nuclear power plant project for KHNP since winning a contract in 2009 to build a similar facility in the United Arab Emirates. The deal is also estimated at more than 40 trillion won, which could be the largest nuclear reactor deal for Korea.

“Details will be determined later,” said Park Il-jun, 2nd vice minister of the Ministry of Trade, Industry and Energy. “But considering various costs including the latest labor cost, the (latest) deal would be bigger than the El-Dabaa Nuclear power plant project in Egypt.”

KHNP in August won a $2.5 billion order to build four units of Egypt’s first nuclear power plant. The South Korean company is the world’s third-biggest operator of nuclear power plants.

Construction of the Polish nuclear plant is expected to start in 2025-2026 as these projects usually takes about two years to start after a definitive agreement is signed, according to Trade Minister Lee Chang-yang, adding that he is confident that the deal will be sealed.

Still, there are concerns that the outcome of an intellectual property rights suit against KHNP could affect the Polish deal. Westinghouse claimed that the South Korean company can’t build nuclear power plants on its own because APR1400 uses its proprietary reactor technology.

Lee said that he expects a ruling will be made soon. He believes that KHNP and Westinghouse will be able to resolve their differences and work together.

Nuclear reactor and plant-related stocks listed in Korea surged on the news. Shares of Doosan Enerbility, a power plant equipment manufacturer, soared 22.64 percent to 16,250 won, and KEPCO E&C, a power plant design and engineering company, rose by a daily limit of 30 percent to 64,500 won.

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