El Dabaa nuclear reactor contract signed by Korea

Computer image of the El Dabaa nuclear power project in Egypt. [ASE]

Korea's participation in the Russian-backed El-Dabaa nuclear power project in Egypt is going ahead despite the war in Ukraine and the sanctions on Russia by the United States.

On Thursday, Korea Hydro & Nuclear Power (KHNP) signed a contract with Atomstroyexport (ASE), a subsidiary of Moscow's state-owned Rosatom, in Cairo for the sale of equipment and materials and the construction of the main and auxiliary buildings on the turbine islands in the reactor project.

According to the government, Rosatom is not on the U.S. government sanctions list and dealing with it will not create problems.

"Yes, fundamentally Russia is sanctioned," said a Ministry of Trade, Industry and Energy official. "But Rosatom is not on the sanction list, and therefore we won't have any problem in getting paid."

In 2017, ASE won the order from the Egyptian Nuclear Power Plants Authority (NPPA) to construct the country's first nuclear power plant. It will have four reactors and is rated at 1.2 gigawatts. Completion of the first unit is set for 2028, and the total value of the deal is estimated at $30 billion.

"The contract with Atomstroyexport JSC for the construction of the turbine islands can be seen as a significant achievement for Korea confirming our great capabilities for project construction and management. which has already been demonstrated in the UAE. Building upon our experience acquired in the UAE, KHNP will do its best for the successful implementation of the El-Dabaa NPP project," said Whang Joo-ho, KHNP CEO.

Korea helped build the Barakah nuclear power plant in the UAE in a deal signed in 2009.

"Winning the El-Dabaa contract is the first visible achievement of the Yoon Suk-yeol's government nuclear energy export policy," said Lee Chang-yang, Minister of Trade, Industry and Energy.

The minister stressed that Egypt is just the start, as Korea is vying for nuclear power plant projects in the Czech Republic and Poland.

"There are many countries, such as the Czech Republic and Poland, that evaluates our nuclear reactors highly and hope to pursue cooperation in the nuclear energy sector," Lee said.

A top official in the president’s office on Thursday said that President Yoon has been working hard to promote Korea's nuclear power industry.

In addition to pitching Korea's nuclear energy to heads of states during his trip to Madrid to attend the NATO Summit in Madrin in June, Yoon expressed Korea's strong commitment to the successful construction of Egypt's first nuclear plant to the Egyptian president through diplomatic channels.

Despite Korea being picked as a main supplier for the nuclear reactor project in December and a preliminary agreement made the following month, the actual contact signing has been delayed as Russia went to war with Ukraine.

The government said all issues have been resolved.

"There could be a wide variety of uncertainties," the president’s office top official said. "However, at the current stage, all problems have been solved and now we have reached on a final agreement with the KHNP CEO personally in Cairo."

The government said it spoke with the U.S. government about the issue with promises of close cooperation.

Lee said the nuclear contract in Egypt has created "strong momentum" for bidding for nuclear projects and is opening up opportunities for Korea to expand into Africa.

"As the Barakah power plant in UAE has been the bridge for us to advance into the Middle East market, our experience in entering the first nuclear energy market in Africa, which has huge potential, will offer more opportunities for Korean companies with exceptional technologies," Lee said.

The Yoon government since day one has emphasized restoring Korea's nuclear energy industry, which was being dismantled under President Moon Jae-in.

Yoon's goal is to win 10 overseas nuclear energy projects by 2030.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]