South Korea signs $2.25 billion deal with Russian nuclear company

South Korea has signed a 3 trillion won ($2.25 billion) contract with a Russian state-run nuclear power company to provide components and build turbine buildings for Egypt’s first nuclear power plant, officials said.

The South Koreans hailed the deal as a victory for their nuclear energy industry, although it made the optics awkward as their American allies push an economic pressure campaign to isolate Russia over its war on Ukraine.

South Korean officials said the US had been consulted in advance about the deal and that the technologies Seoul would provide for the project would not conflict with international sanctions against Russia.

According to South Korea’s Presidential Office and Ministry of Commerce, the state-run Korea Hydro and Nuclear Power Corporation has been subcontracted by Russia’s Atomstroyexport to provide some materials and equipment and build turbine buildings and other structures at the plant being built at El Dabaa. The Mediterranean port city is located about 130 kilometers (80 miles) northwest of Cairo.

Atomstroyexport, also known as ASE, is a subsidiary of Rosatom, a Russian state-owned nuclear conglomerate. The company has concluded a contract with Egypt to deliver four reactors with a capacity of 1,200 megawatts until 2030. The part of the Korea Hydro and Nuclear Power Project extends from 2023 to 2029.

A top aide to South Korean President Yoon Seok-yeol said negotiations have slowed down due to “unexpected variables”, notably Russia’s war on Ukraine and the US-led sanctions campaign against Moscow. on her aggression.

Choi Sang Mok, Yoon’s chief secretary for economic affairs, said South Korea had explained to the United States in advance about its plans to participate in the El Dabaa project and that allies would continue to consult closely as the work continued. As part of the US-led sanctions against Moscow, South Korea has terminated transactions with the Russian Central Bank and sovereign wealth funds and banned the export of strategic materials to Russia.

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Neither Choi nor South Korean Commerce Ministry officials explained how the crisis in Ukraine and sanctions against Moscow had affected negotiations between Korea Hydro and Nuclear Energy and the Amman Stock Exchange.

Choi stressed that South Korea’s participation in the project will not conflict with international sanctions against Russia.

“Any kind of issue can be faced with many uncertainties, but they have all been resolved so far, which is why we were able to complete the agreement,” he said.

Yoon’s office expressed the hope that South Korea’s participation in the El Dabaa project would help the country gain a foothold in future nuclear projects across Africa as well as improve its chances of exporting to countries such as the Czech Republic, Poland and Saudi Arabia.

Korea Hydro and Nuclear Energy had been in negotiations with ASE as the preferred bidder for the turbine-related project since December, prior to the Russian invasion of Ukraine in late February.

Jo Myung-hyun, a senior analyst at the Asan Institute for Policy Studies in Seoul, said the deal would not have been possible without an export approval from the United States because the components provided by Korea for hydro and nuclear power would likely include American technology.

Joe said that the current sanctions against Moscow also do not include specific restrictions related to nuclear energy, and the Biden administration would have no interest in disrupting an important project for Egypt, which it considers a key partner in the region.

Jo said that while South Korea’s participation in the Dabaa project would not immediately be a problem among allies if the Americans agreed to it, things could change depending on how the Russian war on Ukraine proceeds and whether Washington expands its export controls against Moscow.

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Yoon’s office said the Dabaa project is South Korea’s largest export of nuclear power technology since 2009, when a South Korean-led coalition won a $20 billion contract to build nuclear power reactors in the United Arab Emirates.

Yun, a governor who took office in MayHe vowed to boost South Korea’s exports of nuclear energy technology, which he says have fallen under the policies of his liberal predecessor, Moon Jae-in, who sought to reduce the country’s domestic dependence on nuclear power.

Yoon said in a Facebook statement that the deal reaffirms South Korea’s “advanced technology, safety and strong supply chains” in the nuclear power industry. His government has set a goal of exporting 10 nuclear power reactors by 2030.

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