Huge Maintenance Deal
Korea Electric Power Corporation (KEPCO) signed a 54-trillion-won (US$48.6 billion) deal to operate a nuclear power plant in the UAE. This is the KEPCO’s second huge success in the UAE in seven years since the KEPOC exported four nuclear power plants for 21 trillion won (US$18.9 billion) in 2009.
The Korean power company announced that KEPCO CEO Cho Hwan-eik signed the deal with his UAE counterpart Mohamed Al Hammadi, CEO of the Emirates Nuclear Energy Corp. (ENEC), in Abu Dhabi on October 20.
The power plants in the UAE are the results of Korea’s first export of nuclear power plants in 2009. South Korea began to build one nuclear reactor in the UAE in 2012 and completed it in May of 2015. The nuclear power plant is expected to enter its commercial operation after its completion in May of next year. Then, one nuclear reactor will be built each year. The fourth reactor will be completed in May of 2020. The four nuclear reactors will be able to produce a total of 5,600㎿.
This contract will allow KEPCO to run the four nuclear reactors (5,600MW) which will begin to run commercially one by one with ENEC. The Korean utility company secured a US$900 million stake in the UAE company in charge of operating the power plant as a joint business operator. Accordingly, KEPCO will be able to receive dividends for its investment equities in the nuclear reactors in the UAE. KEPCO estimated sales from this project at US$49.4 billion for 60 years.
In addition, KEPCO KPS is expected to sign another contract in the near future with ENEC. The deal is to dispatch close to 1,000 nuclear engineers and technicians to the UAE with ENEC for the next 10 years. KEPCO is the first company that signed a comprehensive deal to cover the construction of a nuclear plant, its operation and maintenance in the world market. The deal enhanced KEPCO’s status in the world energy market a great deal.
KEPCO is expected to land nuclear power plant orders from Vietnam and the Czech Republic. The Vietnamese economy is growing fast with the construction of production facilities of global companies including Samsung Electronics despite the global economic slump. The Vietnamese government reportedly made a positive decision in a preliminary feasibility study on the construction of a Korean-type nuclear plant last year.
Korea Hydro & Nuclear Power Co. is stepping up its efforts to receive an order to build a nuclear power from Vietnam while conducting business activities in the country. The Czech Republic, which showed an economic growth rate of four percent last year, is also cooperating with the Korean government in the construction, operation and maintenance of the new nuclear power plant after signing an MOU on Korea-Czech Republic cooperation on nuclear power plants.