Czech Republic Signs $18B Nuclear Deal with South Korea

PRAGUE, Czech Republic - The Czech Republic signed a $18 billion contract with South Korea's KHNP to build two nuclear reactors on Wednesday, hours after the country's high court lifted an injunction that had blocked the agreement from proceeding.

Czech state-controlled company EDU II and Korea Hydro & Nuclear Power Co., Ltd. (KHNP) finalized the deal digitally following a Supreme Administrative Court ruling that declared a lower court injunction illegal and unenforceable.

The contract represents the Czech Republic's largest procurement deal and forms a central component of the nation's strategy to replace aging coal and nuclear facilities.

The agreement calls for the construction of two 1,000-megawatt reactors at the existing Dukovany nuclear plant, with completion of the first unit targeted for 2036.

"We have removed all doubts and legal obstacles that prevented the nuclear power plant project from being launched," Prime Minister Petr Fiala stated during a televised news conference following the signing ceremony.

Power company CEZ selected KHNP through a competitive tender process last year, defeating a bid from France's Electricité de France SA (EDF).

The project marks KHNP's first nuclear construction contract in Europe.

The total project cost is set at 407 billion Czech crowns ($18.69 billion) in overnight costs, which excludes financing expenses and inflation adjustments specified in the contract.

The final amount remains subject to fluctuations in the exchange rate.

EDF had challenged the tender award and secured an injunction from a regional court in Brno last month, forcing a postponement of a contract signing ceremony originally scheduled for May 7.

A Korean delegation had already departed for Prague when the legal challenge halted proceedings.

KHNP stated on Wednesday that the court decision "clears the way for the timely advancement of this strategically important project."

EDF did not immediately respond to requests for comment regarding the court ruling.

The Czech Republic generates approximately 40 percent of its electricity from two existing nuclear power plants.

The country's electricity export capacity has diminished as its power surplus shrinks due to decommissioning programs at coal plants.

The Czech government acquired an 80 percent ownership stake in EDU II from electricity producer CEZ in April, while CEZ retained the remaining 20 percent. The state maintains a 70 percent stake in CEZ.

Legal proceedings continue, with the regional court that issued the original injunction scheduled to hear EDF's broader complaint against the tender process on June 25.

EDF has separately filed a complaint with the European Commission alleging competition violations, claiming KHNP's bid was artificially low due to undisclosed state subsidies. KHNP has denied receiving state aid.

Czech Industry Minister Lukas Vlcek confirmed that the government is cooperating with the European Commission and stated that no formal investigation is currently underway.

The Czech Republic must obtain new European Union approval for state loans and electricity pricing mechanisms following last year's expansion of the project scope from one reactor to two.

The original single-reactor proposal had previously received EU authorization.