As neighboring Japan celebrates its recent success in winning a $22 billion bid to build a nuclear reactor in Turkey, the Ministry of Trade, Industry and Energy has pledged to build up Korea’s competitiveness in project financing for overseas deals.

“Japan’s financial package was clearly favorable,” Kim Jun-dong, director of the ministry’s energy and resource office, told the local press. “Korea, on the other hand, is relatively weak in the field of project financing, especially when it comes to overseas resource development.”

Project financing is the long-term method of funding infrastructure and industrial projects, under which the money-lending institutions are to secure their loans through the project’s cash flow.

In order to win an initiative in the global construction market in the future, Korea should now turn from conventional cost-reducing strategies to thorough financial design, Kim said.

“For this, it is crucial that the Trade Ministry, the Finance Ministry and the Financial Services Commission cooperate closely,” he also said, alluding to the Japanese government’s full-fledged and organized financial support for the project.

The Turkish government on Friday signed a deal with a Japanese-French consortium to build a second nuclear power station with a capacity of 1,200 megawatts in the Black Sea coast region by 2023.

The contract is Japan’s first successful nuclear-related bid since the tsunami-triggered meltdowns at Fukushima in 2011.

Turkish Prime Minister Recep Tayyip Erdogan cited Japan’s expertise earthquake-proof technology as the key reason, as Turkey is also prone to frequent temblors.

However, observers pointed out that the hidden motive was Japan’s generous financial conditions, especially its low banking loan interest.

The Korea Electric Power Corporation also it found it difficult to compete against the Japanese government’s capital power, it said in its recent report.

“Japan’s public and private sectors, desperate to revive its collapsed nuclear power business, have been working together as one to win the deal,” the report said.

“The Shinzo Abe administration, too, was determined to make up its defeat against Korea in the United Arab Emirates nuclear power plant deal back in 2009.”

By Bae Hyun-jung (tellme@heraldcorp.com)