Czechs pick South Korea's KHNP over French bid in nuclear power tender
South Korea's KHNP preferred to France's EDF
KHNP to build two new units, more possible
Prague plans to sign deal with KHNP in Q1 next year
Adds PM quote, details in paragraphs 5-6, 8, 12, 17
PRAGUE, July 17 (Reuters) -The Czech government on Wednesday picked South Korea's KHNP to build two new nuclear power units, with the possibility of more, after a lengthy tender aimed at keeping a big role for nuclear power in the country's energy mix for decades.
Korea Hydro & Nuclear Power (KHNP) was picked over rival French bidder EDF, despite lobbying for EDF from French President Emmanuel Macron.
Prague earlier this year widened the tender, which is run by 70%-state-owned energy company CEZ CEZP.PR, to have the option to build multiple units, up from an originally planned one.
Under the plans, KHNP will build two new units at CEZ's Dukovany nuclear plant, and they will discuss an option for two more units at the Temelin power station.
The price for one new unit when building two at the same site was estimated at 200 billion crowns ($8.65 billion) in current prices, the government said.
"The Korean offer was better practically in all assessed criteria," Czech Prime Minister Petr Fiala told a news conference.
"We will build two blocks at Dukovany, and in this direction there will be negotiations. And we will discuss about options for another two blocks at Temelin about which we will be able to decide in the future."
Prague plans to sign a deal with KHNP by the first quarter next year.
KHNP has helped put several new reactors online in recent years, including the Arab world's first nuclear power plant in the United Arab Emirates.
By contrast EDF, Europe's only builder of nuclear reactors. has not completed construction of a new unit since 2019 amid project delays.
The Czech government had the final decision on the tender due to national security considerations and cost, which is too high for CEZ - even with a market capitalisation of $20.1 billion - to shoulder alone.
The central European country will lean more on nuclear power as it phases out coal in the coming decade. Nuclear is seen composing half the country's generation mix in the future, up from around a third now.
CEZ aims to start construction of the first new unit at Dukovany later this decade, with expected completion in 2036.
The government and CEZ widened the tender's scope to help lower the price of each block in what is expected to be the country's largest energy investment to date.
CEZ has agreed a financing model with the government for the construction of the first new unit at Dukovany, including low-interest loans and a scheme for pricing of produced electricity - called a contract for difference - to guarantee CEZ a return on the project.
The European Commission gave approval to the state aid for building the first unit.
The Czech Finance Ministry is still looking at the way to finance further units.
($1 = 23.1240 Czech crowns)
Reporting by Jason Hovet in Prague, Joyce Lee in Seoul and Benjamin Mallet in Paris; Editing by Mark Potter
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
