The state-run Korea Hydro & Nuclear Power (KHNP) has been prohibited from bidding for new power plant projects in North America and the European Union (EU), excluding the Czech Republic, and other countries under its agreement with US energy firm Westinghouse over an intellectual property (IP) dispute, industry sources said Tuesday.
Under the agreement signed in January, the KHNP is only allowed to sign fresh deals in the Philippines, Vietnam, Kazakhstan, Morocco, Egypt, Brazil, Argentina, Jordan, Turkey, the United Arab Emirates, Saudi Arabia and South Africa, according to the sources.
But the Korean company is banned from bidding for new nuclear power plant deals in North America and Britain, Japan, Ukraine and EU nations, except for the Czech Republic.
The KHNP and Westinghouse signed the settlement deal in January this year after the latter accused the Korean firm of infringing on its IP, claiming the KHNP's APR 1000 and APR1400 plant designs utilize its licensed technology.
The deal removed a major hurdle for the KHNP-led Korean consortium to sign a final contract in June, with an estimated value of 26 trillion won, to build two nuclear power units in the Czech Republic.
The Czech deal, which marked South Korea's first overseas nuclear power plant contract since 2009, was initially expected to open new doors for Korean firms seeking business opportunities in Europe.
Earlier in the day, KHNP President Whang Joo-ho confirmed his company has closed operations in Poland amid speculations that its deal with Westinghouse influenced the decision.
Poland is the fourth European country where the KHNP confirmed its business closure, following Sweden, Slovenia and the Netherlands.
"After the new Polish administration took office ... the country decided to drop the state-owned enterprise projects (in the nuclear power sector) ... and that is why we withdrew our business there," Whang said during a meeting with the parliamentary industry committee.
It also reportedly includes a condition requiring Korean companies to pass the latter's technology independence verification when independently developing and exporting next-generation nuclear reactors.
The 50-year deal is also said to include provisions requiring the KHNP to sign a goods and services purchase contract worth about $650 million with Westinghouse per export of a single nuclear reactor, and to pay $175 million per reactor in technology licensing fees.
Asked whether the KHNP believes the deal with Westinghouse was fair, Whang said, "As the party accepting the terms, I cannot say it was fair," but added, "I believe it is something we can endure and still make a profit from."
Whang refused to confirm the details of the deal, citing a nondisclosure agreement.
Earlier in the day, the presidential office said it has ordered the Ministry of Trade, Industry and Energy to review whether the deal was signed under due process. (Yonhap)
