Korea wins $2.25 bn deal to build Egypt's 1st nuclear power plant

Korea Hydro and Nuclear Power Co. (KHNP) has received a 3 trillion won ($2.25 billion) order to construct turbine islands under the El-Dabaa nuclear power project in Egypt, the South Korean state-run power company said on Thursday.

This marks Korea’s second nuclear power plant export. The first deal was between Korea Electric Power Corporation (KEPCO) and the Emirates Nuclear Energy Corporation (ENEC) in 2009 to build four APR-1400 nuclear reactors in Barakah near Abu Dhabi.

The El-Dabaa deal is the first nuclear power plant project in Egypt. The $30 billion plant will be constructed in the city of El-Dabaa, 300 kilometers northwest of Cairo. The project will consist of four power units with an electrical output of 1200 megawatt for each unit.

The project is led by Atomstroyexport JSC (ASE JSC), the engineering division of Russian state-run nuclear company Rosatom. ASE JSC won the project from the Egyptian government in December 2017, aiming for the unit 1 reactor’s commercial operation in 2028.

DOOSAN ENERBILITY AND ITS 100 PARTNERS TO JOIN

KHNP, Korea’s major power plant builder Doosan Enerbility Co. and its 100 partner firms will construct some 80 buildings and structures at four units of the power plant. They will also procure and supply equipment and materials for the turbine islands.

The Korean consortium’s work will make up 5-10% of the entire project, according to KHNP.

ASE JSC selected KHNP for exclusive talks on the deal last December. The two parties were planning to sign a contract by April, but it has been delayed due to some concerns surrounding the Russia-Ukraine war.

One of the main woes was a possible default should SWIFT, or the Society for Worldwide Interbank Financial Telecommunication, remove the Russian central bank from its global payment networks.

As SWIFT decided not to ban Russia’s energy transactions, the Russian company accelerated negotiations with KHNP.

TO BOOST EFFORTS IN WINNING EASTERN EUROPE DEALS

The deal will create a lot of jobs in Korea’s nuclear plant sector, which had been sluggish due to the previous President Moon Jae-in administration’s policy to phase out nuclear power.

In a turnaround from the previous regime, the Yoon Seok-yeol administration is striving to export 10 nuclear power plants by 2030. 

Korea has a strong supply chain of nuclear power plants thanks to the world’s lowest level of construction costs and more than 100 local equipment firms.

The government has set up a committee dedicated to exporting such plants and is planning for international cooperation by associating Korea’s strong areas – batteries, electric vehicles, 5G networks – with overseas nuclear power plant construction.

In addition, Korea will intensify its efforts to win more deals with the countries that have to select partners soon for nuclear power plant construction, such as Poland and the Czech Republic.

Write to Ji-Hoon Lee, Dong-Wook Jwa and So-Hyeon Kim at lizi@hankyung.com
Jihyun Kim edited this article.