UAE: Korean consortium to build nuclear power stations

The $20 billion (Dh73.4bn) award, given to the Korea Electric Power Corporation, represents one of the country's largest-ever investments in energy.

South Korean President Lee Myung-Bak (L) and Sheikh Khalifa bin Zayed, President of the UAE and Ruler of Abu Dhabi, shake hands after having a deal signed on economic cooperation in Abu Dhabi. A South Korea-led consortium won a 20-billion-USD contract to build four nuclear power plants in the Middle East country.

A US$20 billion (Dh73.47bn) nuclear tie-up between Abu Dhabi and a consortium of South Korean firms could be a springboard for the sale of nuclear services to other projects in the UAE and across the region, officials said. @Body:The deal represents the first time South Korea will export a power reactor and the first time an Arab country will deploy commercial-scale nuclear technology. The Emirates Nuclear Energy Corporation (ENEC) hinted at greater co-operation with Korea Electric Power Corporation (KEPCO) after concluding a deal, which will include the Korean firms sharing their technology and taking an equity stake in a nuclear operations joint venture. "ENEC and KEPCO have agreed to work together on business ventures in the utility and energy fields outside the boundaries of the UAE project," ENEC said. The company was "eager" to look for business opportunities in partnership with KEPCO, Mohammed al Hammadi, the ENEC chief executive, said yesterday. Mr al Hammadi declined to elaborate on the industries targeted, saying more announcements would be disclosed "down the road". He suggested ENEC was looking with particular interest at investing in the supply chain abroad for uranium fuel, which includes five steps of processing. "According to our programme, in the UAE it is illegal to enrich or reprocess fuel and we want to secure fuel for the future," Mr al Hammadi said. "Each [processing step] has a very mature supply chain, but in the future we will likely invest in this supply chain to establish business opportunities and at the same time secure the fuel." The deal announced yesterday includes an initial supply of uranium fuel that will power the reactors in their first years of operation. A number of Arab states, including Kuwait, Jordan, Egypt and Saudi Arabia, have voiced interest in installing nuclear reactors to make up a shortfall in electricity supplies - interest that has not been lost on nuclear providers across the world. South Korea is looking to Jordan, Turkey and China to win more nuclear contracts, its ministry of land, transport and maritime affairs said yesterday, according to a statement given to Bloomberg. Kim Ssang Su, the KEPCO chief executive, said yesterday that the deal could extend beyond the reactors. "KEPCO will also provide the UAE with its accumulated know-how and experience in developing nuclear power plants, and the Korean government will provide its full support in various aspects of the programme to encourage further exchange and collaboration between our two countries," he said, according a statement from ENEC. The agreement is structured as a long-term partnership, with KEPCO expected to play a role in operating and owning an unspecified stake of the joint venture that operates the reactors. "ENEC and KEPCO have also agreed to key terms under which the Korean investors will have an equity interest in the project," an ENEC statement said. "This arrangement will further strengthen the business relationship and powerfully incentivise the partners to ensure that the necessary experience, technology and skills are available to achieve on-time and on-budget delivery and safe and reliable operation of the plants." Abu Dhabi has welcomed private ownership of as much as 40 per cent in its conventional power stations and analysts had expected further use of that model in the nuclear sector. KEPCO is expected to have a role in the nuclear sector for decades, said Khaldoon al Mubarak, the ENEC chairman. "The nature of this project will require a partnership that endures for nearly 100 years," Mr al Mubarak said. The deal will allow for the gradual transfer of proprietary nuclear technology to Abu Dhabi, ENEC said, a model that South Korea used in the development of its own nuclear programme using technology from the US and Canada. @Email:[e-mail]