10 Years of Supplying 2.9 Trillion Won in Orders... The Nuclear Power Era Returns

Contract Signed for Main Equipment Supply of Shin Hanul Units 3 and 4 on the 29th
2 Trillion KRW Low-Interest Loan Provided to Nuclear Power Companies
Plan to Place 255 Billion KRW Orders and Start Site Preparation within the Year

The signing of the main equipment contract for Shin Hanul Units 3 and 4, supplying orders worth 3 trillion won, is expected to revitalize the domestic nuclear power industry. It is anticipated that the nuclear power industry ecosystem will regain vitality as specialized nuclear power personnel return and partner companies recover their workload.

On the 29th, the Ministry of Trade, Industry and Energy announced that Korea Hydro & Nuclear Power and Doosan Enerbility held a contract signing ceremony near Seoul for the supply of main equipment for Shin Hanul Units 3 and 4, officially starting the production of equipment worth 2.9 trillion won. The 'main equipment for nuclear power plants' refers to key components necessary for nuclear power operation, such as the reactor that generates heat through nuclear fission and the steam generator that produces steam using the generated heat.

The appearance of Shin Hanul Nuclear Power Plant Units 1 and 2 under construction in Uljin, Gyeongbuk (Photo by Korea Hydro & Nuclear Power)

1.4 Trillion Won to be Executed in the First 3 Years

Restoring the nuclear power ecosystem is a core task of the new government, so the project is expected to accelerate from the early stages. Korea Hydro & Nuclear Power, the ordering party, will execute about 1.4 trillion won, which is half of the total contract, during the first three years of the project. Doosan Enerbility, the supplier, had already pre-ordered work worth 45 billion won by February and plans to place additional orders worth about 210 billion won this year. With this contract, 460 partner companies of Doosan Enerbility are expected to resolve the issue of insufficient orders over the next 10 years.

As a result, specialized personnel who had left due to the nuclear phase-out policy can also return. Kim Jong-du, Vice President of Doosan Enerbility’s Nuclear Business Group (BG), explained regarding this contract signing, "We are reinstating personnel who were assigned to affiliates or other internal departments back to the nuclear power industry due to changes in nuclear policy," and added that they plan to hire additional personnel within the year. Since the end of last year, Doosan Enerbility has transferred about 100 employees from other internal departments to the Nuclear BG.

Goal to Start Site Preparation Construction in July

The construction of Shin Hanul Units 3 and 4 is being promoted with the aim of completing the environmental impact assessment under the Environmental Impact Assessment Act within the first half of the year, obtaining approval for the power development project implementation plan as early as July, and starting subsequent site preparation (land leveling) construction. During this process, public hearings to gather residents’ opinions must also be conducted.

Regarding this, Choi Il-kyung, Head of the Construction Business Division at Korea Hydro & Nuclear Power, explained, "The environmental impact assessment review committee was already held in the second half of last year, and environmental analysis is being conducted based on the decisions made at that time." He added, "A residents’ briefing session was held last month with the draft environmental impact assessment report, and the residents’ public hearing scheduled for the 29th will be the point at which we move to the next stage."

Increased Loan Limits and Low-Interest Loan Support for Nuclear Power Companies

Special financial support among the Ministry of Trade, Industry and Energy, the Korea Development Bank, Korea Hydro & Nuclear Power, and Doosan Enerbility will also be strengthened. The Ministry of Trade, Industry and Energy will provide a low-interest financial program worth a total of 200 billion won to small and medium-sized nuclear power companies struggling with management difficulties due to the nuclear phase-out and high interest rates. This financial support will mainly be implemented as unsecured loans rather than collateral loans, as many companies exhausted their collateral limits to survive during the nuclear phase-out period. If companies wishing to borrow provide collateral, additional interest rate reductions are also possible. Starting with the first tranche of 50 billion won on the 31st of this month, loans worth 150 billion won will be implemented from August as the second tranche.

Loan screening criteria will be relaxed. When reviewing loans, future growth potential and contract order performance will be the main focus to increase the likelihood of loan approval, and the loan limit will be increased to 120% of the screening standard amount. This is intended to take into account the circumstances where sales sharply declined and debt rapidly increased. Minister of Trade, Industry and Energy Lee Chang-yang said, "We expect that nuclear power companies, which have faced difficulties until now, will take off again with this policy," and added, "The government will speedily promote the complete normalization of the nuclear power ecosystem within this year."