Regardless of Nuclear Phase-out Policy?
The Korean government began to draw up a financial plan to support the KEPCO in winning an order for a nuclear power plant in the UK. It is said that the government may have launched an exit strategy for its nuclear phase-out policy which developed into an ideological duel prior to the announcement of the conclusion of debates about the fate of Shin-Kori 5 & 6 Power Plants.
According to the agendas of the Nuclear Power Plant Export Strategy Meeting obtained by the office of Kwon Chil-seung, a lawmaker of the ruling Minjoo Party October 16, the government, the Export-Import Bank of Korea, the Korea Development Bank and the Korea Trade Insurance Corporation discussed directions of financial reviews of KEPCO's Moorside nuclear Power Plant project on October 10.
The Moorside Power Plant project is for NuGen, 60% equities of which belong to Toshiba of Japan, to build three nuclear power plants in the UK. The project will cost US$18 billion. With the fall of Toshiba, since the beginning of this year, the UK government has been asking KEPCO to take over equities from Toshiba.
The government is working on creating a project financing (PF) structure with KEPCO at the center. Necessary financial resources will be delivered by creditors led by three export financial institutions. The government's plan is to reduce risks that may arise during the implementation of the Moorside Power Plant project such as demanding the UK government have more equities in the project and pre-applying project costs that will stem from a delay in progress in the project.
A method to raise US$18 billion in project cost was also devised. According to the government, US$7 billion of US$12.6 billion in primary financial arrangement be financed through the Export-Import Bank, the Korea Trade Insurance Corporation and the Korea Development Bank. The remaining amount will be raised via the UK Infrastructure and Project Authority, the Export-Import Bank of the US, and Japan Bank for International Cooperation. KEPCO will be responsible for US$ 2.2 billion of US$5.4 billion that will be raised by project operators. A plan was also discussed that a joint Korean public-private bidder and the UK government participate in the project by purchasing equity stakes.
However, the Ministry of Trade, Industry and Energy in charge of nuclear power plants has yet to confirm a concrete financial support plan. "The decision to acquire KEPCO's stake from NuGen will require a concrete financial support plan will be mapped out only if KEPCO makes up its mind to take over equities in NuGen." said an official of the ministry. The reason why the ministry is cautious is that project operators can be exposed to risks such as delays in payment, changes in regulations among others at any time during long-term construction with huge funds.
On the other hand, two days before the announcement of the results of the public debate on nuclear power plant construction in Korea, Cho Hwan-ik, president of KEPCO, will meet with the minister of business, energy & industrial strategy (BEIS) of the UK. On top of that, KEPCO will submit financial requirements for the export of a nuclear power plant to Saudi Arabia export to financial institutions as early as this week.