KB Securities: Czech Nuclear Power Plant Delay Likely, but Contract Cancellation Risk Limited

On May 8, KB Securities stated that the possibility of the cancellation of the Czech nuclear power plant contract, which Korea Hydro & Nuclear Power (KHNP) won but was ordered to halt by a Czech court, is limited.

Recently, the Brno District Court in the Czech Republic issued an injunction to suspend the final contract for the Czech nuclear power plant. This decision was made after accepting a request for an injunction to suspend the contract, filed by the competing company, Electricite de France (EDF).

Jung Hyejeong, a researcher at KB Securities, said, "Despite EDF's continued objections, we believe the likelihood of KHNP's Czech nuclear power plant project being canceled is limited," explaining, "This is because the Czech government is strongly committed to introducing nuclear power, and KHNP is the best option in terms of both economic feasibility and timeliness."

She added, "It appears that the contract can only be resumed after the related litigation is concluded," and assessed, "The fact that a clear timeline for resumption has not been presented is a risk factor."

However, she predicted that this delay in the contract could actually serve as an opportunity to highlight the competitiveness of the Korean nuclear power supply chain.

Jung said, "During the litigation process, the comparison of conditions between EDF and Team Korea could further underscore the competitiveness of the Korean nuclear power supply chain, particularly in terms of timeliness and economic feasibility."

She continued, "If this competitiveness is reaffirmed, Doosan Enerbility, which produces main equipment for not only Korean-type nuclear power plants but also large-scale nuclear plants and SMRs, is expected to benefit significantly. In addition, it could also support the subsequent nuclear power exports of Team Korea members such as Korea Engineering & Construction and Korea Plant Service & Engineering."