Billion contract | Deal for $2.25 billion between S Korea and a Russian nuclear company

To supply parts and build turbine buildings for Egypt's first nuclear power plant, South Korea has signed a $2.25 billion contract with a Russian state-run nuclear energy corporation.

AP — SEOUL, South Korea According to officials, South Korea, and a Russian state-run nuclear energy corporation have agreed to a 3 trillion won ($2.25 billion) contract to supply parts and build turbine buildings for Egypt's first nuclear power plant.

Although it created problematic optics as their American partners continue an economic pressure campaign to isolate Russia over its war on Ukraine, the South Koreans welcomed the agreement as a victory for their nuclear power industry.

Officials from South Korea claimed that the United States was consulted before the agreement was made and that the technologies provided by Seoul for the project would not conflict with existing sanctions against Russia.

The state-run Korea Hydro and Nuclear Power were subcontracted by Russia's Atomstroyexport to provide certain materials and equipment and build turbine buildings and other structures at the plant being built in Dabaa, according to the South Korean presidential office and commerce ministry. The town on the Mediterranean coast lies 80 miles (or 130 km) northwest of Cairo.

Rosatom, a state-owned Russian nuclear business, has a subsidiary called Atomstroyexport, also known as ASE. Egypt has a deal with the business that calls for four 1,200 megawatt reactors to be delivered by 2030. The project's portion including Korea Hydro and Nuclear Power runs from 2023 to 2029.

President Yoon Suk Yeol of South Korea's senior adviser claimed that "unexpected elements," primarily Russia's war in Ukraine and the U.S.-led sanctions campaign against Moscow over its aggressiveness, were slowing down the negotiations.

Yoon's senior secretary for economic affairs, Choi Sang-Mok, stated that South Korea informed the United States in advance of its intentions to participate in the Dabaa project and that the allies will continue to keep in close contact as work progresses. South Korea has stopped doing business with Russia's central bank and sovereign wealth funds as part of sanctions led by the United States against Moscow. It has also restricted exports of vital commodities to Russia.

Choi and representatives from the South Korean trade ministry didn't go into detail about how the Ukraine situation and the sanctions imposed on Moscow influenced talks between Korea Hydro and Nuclear Power and ASE.

Choi emphasized that South Korea's participation in the project will not conflict with global sanctions imposed on Russia.

Any type of difficulty can be accompanied by several uncertainties, but those have all been handled as of now, and that is why we were able to seal the deal, he added.

Yoon's office stated the wish that South Korea's involvement in the Dabaa project would provide it a footing in upcoming nuclear projects in Africa and increase its chances of exporting to nations like the Czech Republic, Poland, and Saudi Arabia.

Before Russia invaded Ukraine in late February, Korea Hydro and Nuclear Power had been in talks with ASE as the preferred bidder for the project including turbines since December.

Go Myong-Hyun, a senior expert at Seoul's Asan Institute for Policy Studies, claimed that the agreement couldn't have happened without American export authorization because the parts supplied by Korea Hydro and Nuclear Power probably contain American-developed technology.

The Biden administration would not be interested in interfering with an important project for Egypt, which it views as a critical partner in the area, and current sanctions on Moscow do not specifically include limits related to nuclear energy, Go said.

If the Americans gave their approval, South Korea's participation in the Dabaa project wouldn't immediately cause problems between the allies but Go warned that depending on the outcome of Russia's conflict in Ukraine and whether Washington broadens its export restrictions against Moscow, things could change.

In 2009, a South Korean-led consortium was awarded a $20 billion contract to develop nuclear power reactors in the United Arab Emirates. According to Yoon's office, the Dabaa project is South Korea's largest export of nuclear power technology since that time.

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