KHNP CEO defends economic viability of Czech nuclear plant deal

Home > Business > Economy

KHNP CEO defends economic viability of Czech nuclear plant deal

Published: 09 May. 2025, 10:23 Updated: 09 May. 2025, 14:28

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

Korea Hydro & Nuclear Power CEO Whang Joo-ho speaks about its $18 billion nuclear power plant deal with the Czech Republic during a press briefing in Prague on May 8. [JOINT PRESS CORPS]

PRAGUE — Korea Hydro & Nuclear Power (KHNP) CEO Whang Joo-ho highlighted the economic fundamentals of the $18 billion nuclear plant project in the Czech Republic, pledging to avoid a repeat of the diminished profitability resulting from construction delays that affected the Barakah project in the United Arab Emirates.

Whang's vow aligns with his commitment to advancing the deal, which was abruptly halted Tuesday, just a day before its signing, following a Czech court ruling that halted all progress due to an injunction filed by a rival bidder, France's EDF.

"It can be known that the $18 billion price tag for two 1-gigawatt-hour reactors in Dukovany in the Czech Republic is significantly higher compared to what we typically handle domestically, as the budget for each 1.4-gigawatt-hour Shin-Hanul reactor was some 6.5 trillion won [$4.6 billion]," Whang said during a press briefing in Prague on Thursday, dismissing speculation that KHNP jumped at the project without a thorough profitability assessment.

Cooling towers at Dukovany nuclear power plant in the Czech Republic, where Korea Hydro & Nuclear Power is set to build two reactors at a deal valued at $18 billion. [SARAH CHEA]

"The increased scope and costs during the Barakah project were primarily due to additional tasks requested by the client; the responsibility for the delays was not largely on us."

The Barakah project, for which KHNP won a 20 trillion won contract to build four reactors, began construction in 2012 with a goal of starting operations in 2020. However, construction was delayed by four years, and with rising costs, the reactors' profitability has reportedly fallen to around 0.3 percent, significantly lower than the initially expected 10 percent.

Whang also emphasized that he reaffirmed with the Czech government a shared commitment to proceed with the Dukovany project despite the legal challenge.

"All the practical preparations for the construction will be completed [before the deal conclusion]," Whang said, adding that "nothing changes in any meaningful way" due to the court's decision.

"As the Czech cabinet has just approved all aspects of our contract, we expect the process to move forward smoothly."

Against that backdrop, Daniel Benes, CEO of the Czech state-run CEZ, solidified his intention to continue business with KHNP, saying that he has “no further room to negotiate with EDF.” CEZ will appeal to a higher administrative court next week seeking to nullify the order.

Ahn Duk-geun, Seoul's minister of trade, industry and energy, also said the court battle will rather be a chance for KHNP to place itself in a superior position for further negotiations on the Temelin project, where Prague plans to construct two more reactors.

"If this serves as an opportunity for the Czech public to acknowledge KHNP's superior safety, reliability and cost-efficiency in building nuclear facilities, it may well prove to be a blessing in disguise, particularly in light of the upcoming tender for the Temelin units 3 and 4 anticipated in five years.”

CEZ CEO Daniel Benes speaks during a press briefing about a delay in the signing of an $18 billion contract with Korea Hydro & Nuclear Power in Prague on May 7. [JOINT PRESS CORPS]

Meanwhile, Whang described the recent dispute between KHNP and its parent company, Korea Electric Power Corporation (Kepco), over the costs of the Barakah nuclear project, which has escalated into an international issue, as a "normal course of action."

KHNP recently filed a request for arbitration with the London Court of International Arbitration regarding the unsettled construction payment from Kepco, claiming $1 billion, caused by construction delays in Barakah after they failed to reach a consensus for almost a decade. The dispute between two state-run companies generated strong backlash from the public, becoming an international embarrassment.

"$1 billion is not a small amount of money; in commercial activities of this magnitude, such procedures are a standard part of the process," Whang said, pinpointing that the claim of "international embarrassment is completely unfounded."

"The contract we signed with Kepco is governed by British law, which is the same legal framework as the contract Kepco originally entered into with the Barakah project. Thus, we also chose to go to the London Court of International Arbitration," Whang added.

BY SARAH CHEA, JOINT PRESS CORPS [[email protected]]