Team Korea, including Korea Hydro & Nuclear Power Co. (KHNP), has escaped the risk of the European Union (EU) Foreign Subsidies Regulation (FSR) for the construction of the Dukovany nuclear power plant in the Czech Republic that it won.
KHNP said on the 6th that it received an official notice from the European Commission (EC) on the 5th (local time) that it would not open an in-depth investigation under the EU Foreign Subsidies Regulation into the Dukovany nuclear project.
The EU's Foreign Subsidies Regulation is a system that examines whether financial support provided by non-EU countries to corporations distorts competition in the EU internal market. It was introduced to review and regulate whether fair competition within the EU is distorted when corporations that have received subsidies from governments or public institutions of non-EU countries such as Korea, the United States, and China conduct mergers and acquisitions (M&A) within the EU or participate in public tenders.
After KHNP was selected as the preferred bidder for the Dukovany nuclear project, Électricité de France (EDF), which lost in the bidding, filed a complaint with the EC against KHNP, alleging that KHNP and Team Korea violated the EU Foreign Subsidies Regulation. At the time, EDF argued that the Korean government and state-run banks provided excessive financial support to KHNP, enabling a "low-price bid" below market rates.
In response, the EC conducted an ex officio preliminary review of KHNP and Team Korea starting in February last year. In the meantime.
KHNP countered that it had not received any subsidies from the government and that the Czech nuclear project was not subject to the regulation because the bidding began before the EU Foreign Subsidies Regulation was established.
In the end, the EC accepted KHNP's rebuttal and decided not to conduct an in-depth investigation. It means the commission did not find grounds to believe there was competition distortion due to subsidies.
Minister Kim Jung-kwan of the Ministry of Trade, Industry and Resources said on Facebook the same day that "this decision by the EC is significant because it is an official judgment made after directly reviewing the matter," and added, "There had been concerns and criticism at home that the project might be invalidated or that it was a low-price bid dependent on government support. This decision confirms that KHNP and Team Korea have faithfully pursued the project in compliance with international norms and the EU's laws and systems."
Minister Kim added, "It is a meaningful achievement showing that the competitiveness of Korea's nuclear industry is based on technological prowess, safety, and project management capabilities," and said, "The Dukovany nuclear project is not just a construction project but a strategic cooperation initiative through which Korea and the Czech Republic will jointly develop technology, industry, and talent for decades to come."