Czech Republic has finalised an $18bn agreement with South Korea’s Korea Hydro & Nuclear Power (KHNP) for the construction of two nuclear reactors, following the removal of a legal injunction. Czech Prime Minister Petra Fiala announced the completion of the contracts between the Czech state-controlled company EDU II and KHNP, reported Reuters.
The transaction, which is the largest procurement deal in the Czech Republic’s history, received the go-ahead from a high court, effectively overturning a previous injunction that had delayed the agreement. This development is part of the nation’s strategy to replace its outdated coal and nuclear facilities.
Power company CEZ had selected KHNP last year to build two 1,000-MW reactors at the Dukovany nuclear plant, marking KHNP’s inaugural project in Europe. The initial reactor is anticipated to be operational by 2036.
The contract had faced challenges from EDF, a French company, which had contested the tender process and initially secured an injunction from a lower court, postponing the signing scheduled last month.
The Czech Republic, which currently derives around 40% of its electricity from two nuclear plants, is experiencing reduced power exports due to the closure of coal plants. The new reactors are expected to cost approximately CZK407bn ($18.69 billion) in “overnight” costs, excluding financing and inflation-related adjustments.
The Czech government, which acquired an 80% stake in EDU II from electricity producer CEZ earlier, will provide financial support and a pricing scheme to ensure project viability. CEZ retains a 20% stake, while the state holds 70% ownership of CEZ.
A hearing on EDF’s complaint against the tender is scheduled for 25 June, while EDF has also approached the European Commission, alleging that KHNP’s bid constituted state aid. KHNP has denied these claims, and Czech Industry Minister Lukas Vlcek stated there is no formal investigation by the Commission.
The Czech government is also seeking renewed EU approval for state loans and pricing mechanisms, following last year’s expansion of the project from one to two reactors.
