Sanctions against Russia Likely to Affect Korea’s Nuclear Power Project in Egypt

International sanctions against Russia are predicted to affect South Korea’s participation in the nuclear power project in El Dabaa, Egypt. This is because the project launched by the Nuclear Power Plants Authority of Egypt is being led by JSC ASE, a subsidiary of Rosatom, which is a Russian state corporation headquartered in Moscow.

At present, Korea Hydro & Nuclear Power is the only candidate in the secondary system part of the project and talks are underway between the corporation and JSC ASE before contract signing scheduled for April. The El Dabaa project is to build four 1,200 MW nuclear power plants by investing US$30 billion and it is not under the sanctions as of now because the end user is the government of Egypt.

The project is based on borrowings from the Russian government and the Egyptian government is supposed to repay the borrowings by running the power plants. A potential problem is that the borrowings may not be given as scheduled as Russia is facing increasing financial sanctions.

The Russian government is trying to prepare the money even by limiting Russians’ remittance to foreign banks. However, the sanctions are likely to paralyze the financial system of Russia, and then Korea Hydro & Nuclear Power may fail to get its project proceeds.