Opinions are divided in the nuclear power industry over changes to the overseas nuclear power plant export framework. There is little disagreement about ending the practice in which Korea Electric Power Corporation and its subsidiary Korea Hydro & Nuclear Power divided up countries and each bid for nuclear exports, but views differ on the pros and cons.
Analysis suggests that having KEPCO leverage its external recognition, negotiating power, and funding capacity to lead external negotiations while joining KHNP, which has construction and execution capabilities, as joint prime contractors will produce different practical benefits by country. Joint entry may be advantageous for expansion into middle-income countries that lack the funds needed to build large nuclear plants, but in the United States, which has its own funding, it could work as a disadvantage.
The Ministry of Trade, Industry and Resources on the 14th, chaired by Minister Kim Jung-kwan, held the 1st Nuclear Power Export Strategy Council 2026 with KEPCO President Kim Dong-cheol and KHNP President Kim Hoe-cheon in attendance, and announced a plan to streamline the nuclear export system.
First, the government decided to integrate the export markets that KEPCO and KHNP had divided between them since 2016. KEPCO had handled 13 countries, including the UAE, Vietnam, Saudi Arabia, the United States, and South Africa. KHNP handled 25 countries, including the Czech Republic, the Philippines, Indonesia, the Netherlands, and Poland. Going forward, regardless of country, the two companies will jointly carry out overseas project development and prime contracting, with KEPCO leading external negotiations and equity investment, and KHNP leading construction and operation.
The government will also launch a public-private Nuclear Export Planning Committee to strengthen external reviews and advice on nuclear export planning and coordination, economics, and risk. In addition, within the year it will enact the Nuclear Export Promotion Act to provide a legal basis for a Nuclear Export Control Agency that will comprehensively handle nuclear export project development, feasibility studies, negotiations with clients, bidding, and contracts. However, as the Nuclear Export Control Agency will be unified under either KEPCO or KHNP, some note that if KEPCO takes the lead agency role, the structure would be no different from the UAE Barakah nuclear project award.
◇ KEPCO holds advantages in external recognition and financing; outlook is uncertain in cash-rich U.S.
Industry officials say that if KEPCO and KHNP divide the fields where each has strengths and proceed jointly, it could have a risk-dispersion effect. However, some point out that joint entry could be disadvantageous depending on each importing country's ability to secure funds.
Given the nature of nuclear projects, which require large-scale funding, KEPCO's external recognition can aid nuclear exports. KEPCO was the prime contractor for Korea's first nuclear export project, the UAE Barakah nuclear plant, and is carrying out 31 projects in 12 countries.
Starting with the 1995 Malaya thermal power plant performance restoration and operation project in the Philippines, KEPCO has carried out 17 thermal power projects in 10 countries. It is also conducting renewable projects totaling 7 megawatts (MW) in seven countries, including wind in China and solar construction and operation in the United States. In addition, it has been winning combined-cycle gas construction and operation projects in places such as Jordan and Mexico, raising its external recognition.
KEPCO also completed project financing (PF) for the UAE Barakah nuclear construction. KEPCO holds an 18% equity stake in Nawah Energy Company, the operator of the UAE Barakah plant. The remaining 82% is held by the Emirates Nuclear Energy Corporation (ENEC) in a joint-venture structure. KEPCO is known to have invested about $1.22 billion in equity, or about 5% of the total project expense including construction costs. KEPCO is slated to settle from this year the plant's operating revenue and dividends from its equity investment.
Accordingly, if KEPCO and KHNP jointly pursue nuclear exports by leveraging KEPCO's PF capabilities, it could be advantageous for expansion into middle-income countries such as Malaysia that lack funding. In the case of the Dukovany nuclear plant in the Czech Republic, the Czech government did not request separate PF from KHNP, but the funding situation is different in middle-income countries.
A KEPCO official said, "KEPCO has been doing overseas business since the 1990s, so it has a large portfolio," and added, "Even on the surface, KEPCO and KHNP are a parent and a subsidiary, so foreign institutions may judge that the parent company KEPCO has higher credibility."
An industry official said, "When middle-income countries like Malaysia seek to introduce nuclear power, they may even demand PF participation from KEPCO and KHNP," adding, "In such cases, KEPCO's external recognition and PF experience can work as advantages."
However, some argue that in countries like the United States, which can secure their own funding, listing KEPCO and KHNP as joint prime contractors could actually reduce the odds of winning. The government plans that when KEPCO and KHNP export nuclear plants going forward, they will establish a joint venture (JV), etc., and designate that entity as the contractor.
According to the industry, it is nearly impossible for KEPCO and KHNP to enter the U.S. jointly or alone and sign a nuclear construction contract. In the United States, the chances of building nuclear plants domestically increase if a JV is formed with a local nuclear-related company.
Another industry official said, "In the United States, even without KEPCO's PF capabilities, funds can be arranged domestically, so if KEPCO joins, it only increases the number of parties to share revenue," adding, "KHNP and a U.S. nuclear corporation forming a JV is sufficient for entry into the U.S."
◇ Why KEPCO seeks to directly oversee nuclear exports
Some question whether KEPCO needs to participate as a joint prime contractor, given that it has external recognition, negotiating power, and funding capacity but lacks nuclear-related technology and personnel. Pointing to KHNP's solo win at the Dukovany plant in the Czech Republic, the logic is that KHNP alone is sufficiently capable of winning and building nuclear projects.
At present, KEPCO is in a difficult position to export nuclear plants independently. KEPCO won the UAE Barakah contract in 2009, 17 years ago. In the meantime, many nuclear-related personnel at KEPCO have retired. KEPCO's research and development (R&D) expense, including nuclear, is smaller than that of KHNP, which directly operates plants. As of the end of 2025, KEPCO's total R&D spending is 277.285 billion won, just over half of KHNP's 508.849 billion won.
Even so, some say this is not a bad option from KHNP's perspective, given its technology and construction capabilities. Unlike during the UAE Barakah export, it can now sign contracts on equal footing with KEPCO. In the UAE Barakah export, KEPCO was the prime contractor and KHNP handled construction somewhat like a subcontractor. Under the newly announced streamlining plan, KEPCO and KHNP will henceforth sign contracts as equals.
In addition, under the previous allocation, the United States was a market where KEPCO handled exports, so for KHNP this could be an opportunity to expand its turf. With the Donald Trump administration in the United States calling for nuclear expansion, the U.S., along with the Czech Republic and the Philippines where KHNP is eyeing additional orders, is the most coveted region for the nuclear industry.
Some interpret KEPCO and KHNP stepping up as prime contractors for nuclear exports as a move to improve KEPCO's financial structure. Despite posting 378.42 billion won in operating profit on a consolidation basis in the first quarter this year, KEPCO's finances are weak, with liabilities alone at 205.6 trillion won, including 129.8 trillion won in borrowing fund. An industry official said, "Over 90% of KEPCO's sales are electricity sales revenue, so without rate hikes there is little room to quickly improve its finances," adding, "If it exports nuclear plants, other sales will occur, which could improve its financial structure."
◇ KHNP racks up trillion-won losses in solo overseas nuclear projects; "safeguards are needed"
The overhaul was triggered by an internal feud overseas between KEPCO and KHNP over additional construction costs for the UAE Barakah plant, which total around 1.6 trillion won, but it is also said to have been influenced by the heavy losses KHNP incurred in overseas nuclear contracts it signed alone. The government's intent to add safeguards following role-sharing has been reflected.
Last year, KHNP recognized risks arising during its overseas nuclear projects in its financial statements and set aside 1.4346 trillion won in provisions for construction losses. This is reflected as is in the parent KEPCO's consolidation financial statements.
First, KHNP set aside 1.2146 trillion won in provisions for construction losses on the El Dabaa nuclear construction project in Egypt, where it is participating as a subcontractor to a Russian nuclear corporation. Costs surged as it had to procure equipment suited to a Russian-type reactor, compounded by post-war raw material price spikes and logistics disruptions. Critics questioned whether KHNP had struck an overreaching deal with a country at war just to show results.
In the project to install a tritium removal facility (TRF) at Romania's Cernavodă nuclear plant, it also set aside 220 billion won in provisions for construction losses. This was due to more than a one-year delay caused by Europe's strict permitting procedures and rising equipment costs.
In the contract signed last year to build Units 5 and 6 of the Dukovany plant in the Czech Republic, a "secret agreement" concluded to end an intellectual property (IP) dispute with Westinghouse (WEC) drew controversy. Under the deal, Korea is said to face restrictions on entering the North American and European markets for the next 50 years and to have to pay Westinghouse more than 1 trillion won per unit in expense.
A government official said, "There are problems arising from KHNP moving too far ahead in nuclear projects, and if we leave all nuclear business to KHNP, there is no way to control it," adding, "We are deliberating on how to best utilize and rally the capabilities and strengths of the two institutions."