"Nuclear Exports to the U.S. to Materialize in 2028...$2 Billion Payment per APR1400 Unit"

Launch of the Nuclear Power Export Leaders Forum

Ministry of Trade, Industry and Energy Announces Key Points of the Korea-U.S. Nuclear Power Framework

Upper Limit Set on Compensation Including Technology Fees, Services, and Nuclear Fuel
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Panoramic view of Unit 4 of the Barakah Nuclear Power Plant in the UAE, a Korean-type nuclear reactor (APR1400). Korea Electric Power Corporation (KEPCO)

The 120 billion dollar Korea-U.S. nuclear power plant framework, agreed upon by South Korea and the United States on October 1, 2026, is expected to see site selection and other specifics materialize by 2028. In order to export the Korean-type nuclear power plant APR1400 to the United States, it appears that Korean companies will need to pay Westinghouse Electric Company (WEC) 2 billion dollars (approximately 2.7 trillion won) per unit as compensation. Stake participation in WEC is planned to be carried out via a consortium model.

On October 7, the Ministry of Trade, Industry, and Energy publicly announced these results from negotiations with the United States regarding exports at the "Nuclear Export Leaders Forum Launch and First Forum" held at the Korea Press Center.

Lee Sang-eun, Director of Nuclear Power Export Promotion at the Ministry of Trade, Industry, and Energy, explained, "The Korea-U.S. nuclear framework sets a broad direction for cooperation, including nuclear power plant construction in the U.S. using a joint investment fund. It covers investments in large nuclear projects, construction sequencing, revision of the Settlement Agreement (SA), and equity acquisition in WEC." He added, "On the basis of this framework, we plan to propose concrete projects in the future. After going through the procedures outlined by the Korea-U.S. Strategic Investment Act, we will decide whether or not to proceed with the projects."

According to the Korea-U.S. nuclear framework, South Korea will invest 120 billion dollars in constructing two units of the Korean-type APR1400 reactor and Westinghouse's AP1000 reactors in the United States. The construction order is: two AP1000 units, two APR1400 units and two AP1000 units, and then two more AP1000 units. The framework clearly states that "for the design, construction, and procurement (EPC) contracts of phases one and two, both sides will make reasonable efforts to keep the timing gap within 6 months," aiming to remove concerns about the possible delay of Korean nuclear plant exports.

For every two nuclear power plants, the total project scale is 30 billion dollars, consisting of 25 billion dollars in project expenses and 5 billion dollars in reserve funds. The Ministry explained, "Even if the cost per two units exceeds 30 billion dollars, there will be no additional financial burden from the Korea-U.S. investment fund. The reserves of 5 billion dollars allocated per two units (for a total of 20 billion dollars across eight units) will be included in the 200 billion dollar Korea-U.S. strategic investment fund even if not used."

Created using generative AI based on the announcement from the Ministry of Trade, Industry and Energy.

Large-scale nuclear power plants will be constructed within U.S. federal government-designated sites. However, for sites proposed by the United States, South Korea may request alternative locations. When designating sites, equal and non-discriminatory criteria must be applied to both Westinghouse and Korean-type nuclear power plants. Director Lee stated, "By around 2028, we can expect the project to take concrete shape somewhere in the U.S." Notably, 2028 is also a U.S. presidential election year.

According to the Settlement Agreement (SA) signed last year between Korea Electric Power Corporation (KEPCO), Korea Hydro & Nuclear Power, and Westinghouse, South Korea is prohibited from exporting nuclear power plants to the United States. Korea and the United States have agreed to revise the SA to make an exception, thus allowing two APR1400 units to be constructed in the U.S. Director Lee added, "The compensation for U.S. projects, including technology fees, service work, and nuclear fuel, will be determined later through negotiations between the companies," and clarified, "An upper limit has been established for this compensation."

The cap set by both sides is understood to be 2 billion dollars per APR1400 unit. Immediately after the announcement of the Korea-U.S. nuclear framework, Cameco, a Canadian uranium company holding a 49% stake in WEC, projected that approximately 2 billion dollars per APR1400 unit would be provided as compensation for this "one-time exemption."

Under the previous SA, South Korea had agreed to pay a technology usage fee of 107 million dollars per APR1400 unit exported overseas and to provide goods and services to Westinghouse worth 650 million dollars. In the case of exports to the United States, the inclusion of nuclear fuel supply rights means South Korea will be required to pay WEC up to 2 billion dollars per unit as compensation.

However, by exporting nuclear power plants to the United States, South Korea expects to secure participation opportunities for its companies, allowing a significant portion of the investment to be returned to domestic firms.

Once the relevant procedures are completed, South Korea plans to remit 10 billion dollars to the U.S. by December 31, 2026, as an advance order for long-lead items. The government expects this expenditure to create opportunities for Korean equipment suppliers. The framework also includes provisions for prioritizing Korean company participation or recommending Korean firms for involvement.

South Korea will also acquire a 5-10% equity stake in WEC. Additionally, should WEC go public, South Korea will be able to acquire shares at a 10% discount to the offering price. This is expected to expand Korean participation in the AP1000 supply chain. The equity investment in WEC will be handled as a consortium, based on interest from Korean companies.

This content was produced with the assistance of AI translation services.