Czechs Sign $18 Billion Deal With South Korean Firm To Build Nuclear Reactors As Court Gives Go-Ahead. Check Details

(MENAFN- Live Mint) The Czech Republic's state-controlled company EDU II and South Korea's KNHP officially signed contracts for the construction of two new nuclear power reactors, a deal valued at $18 billion, reported Reuters.

This significant development comes after a court lifted an injunction that had temporarily halted the deal's closing.

Top court clears path for deal

According to Reuters, the Supreme Administrative Court on Wednesday overturned a lower court's injunction that had prevented the signing of what is now the largest procurement deal in Czech history. The ruling clears the way for the project to proceed which is crucial for the Czech Republic's energy transition as it aims to replace ageing coal and nuclear units.

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The injunction was challenged and won by France's EDF, a rival bidder, last month. This legal challenge had derailed the initial signing of the contract that was planned for May 7, with a ceremony prepared and a Korean delegation already on their way to Prague.

However, EDU II and KHNP appealed to the lower court's decision after which the Supreme Administrative Court said that it heeded those complaints and found the injunction issued by a lower court to be illegal and unverifiable.

What the companies say

According to Reuters, KHNP said in a statement that Wednesday's court decision "clears the way for the timely advancement of this strategically important project." The injunction posed a major obstacle which threatened the project's timeline amid possibly lengthy court battles and the looming expiration of KHNP's bid.

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Last year, the parent company of EDU II, CEZ selected KHNP to build two 1,000-megawatt units to expand its Dukovany nuclear plant, giving KHNP its first project in Europe. EDF has sought to overturn this decision on multiple occasions.

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The government will be providing loans and a pricing scheme to make the project profitable, taking an 80 per cent stake in EDU II firm running the project in April, with CEZ retaining 20 per cent, said Reuters.

What's next in the legal battle?

The lower court that initially issued the injunction is scheduled to hold a hearing on EDF's complaint against the tender itself on June 25, Other than that, EDF has also petitioned the European Commission, alleging that KHNP's winning is directly linked to state aid because the company offered a low price. KHNP has consistently denied these allegations.

The Czech Republic also needs to secure new European Union (EU) approval for state loans and the electricity price mechanism, as the project was expanded from one to two reactors after initial EU clearance.

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