KHNP says EC has dropped foreign subsidy probe into Czech project

The Czech government selected Korea Hydro & Nuclear Power (KHNP) as its preferred bidder in July 2024 for two new units near the current Dukovany nuclear power plant, about 200 kilometres southeast of Prague. Two more units at the Temelín nuclear power plant are also being considered. The engineering, procurement and construction contract was signed in June 2025, for two APR-1000 units at a projected cost of CZK407 billion (USD18.6 billion). The aim is to start construction in 2029.

France's EDF, which had been eliminated from the bidding process, launched legal challenges against the contract decision. The company's objections to the tender process included the belief that the KHNP offer price and the inclusion of a guarantee that the construction would not be delayed or become more expensive, would be "unfeasible without illegal state aid given the prices in the nuclear industry". EDF said that if their rival bidder had state support it would breach European Union rules. KHNP rejected EDF's claims and said "we emphasise that we have not received any subsidies that could damage or distort fair competition in relation to the project".

In response, the European Commission (EC) launched a preliminary review of KHNP and 'Team Korea' - the winning consortium of Korean companies that includes KHNP - in February 2025 to independently examine matters related to the new nuclear power plant project in the Czech Republic. The EU Extraterritorial Subsidy Regulation is a system designed to assess whether financial contributions provided to companies by non-EU countries distort competition in the EU market.

"KHNP and Team Korea faithfully cooperated with the preliminary review process by submitting relevant materials and explaining necessary matters in accordance with the request of the EC," KHNP said. "As a result, the EC completed the preliminary review and finally notified KHNP on 5 June that it had decided not to initiate an in-depth investigation."

"This decision is an official judgement made by the EU after directly reviewing the relevant issues," Industry Minister Kim Jung-kwan was quoted as saying by The Chosun Daily. "It is a result of confirming that KHNP and Team Korea have faithfully complied with international norms and EU laws and systems while pursuing the project."

Czech Industry and Trade Minister Karel Havlíček said on social media platform X, that the EC decision "to close the preliminary review under the Regulation on distortive foreign subsidies affecting the internal market ... is good news for this project and for the development of the nuclear industry and the future assurance of energy security in the Czech Republic and the European Union".

There has been a separate EC review taking place relating to the Czech new nuclear plan - in April 2024 the EC approved the original Czech government funding plan for a single new nuclear reactor at the Dukovany nuclear power plant site, but in October last year the Czech Republic officially notified the EC it had expanded its plans to two new nuclear units. The following month, the EC announced it had launched an inquiry into Czech funding plan for new nuclear. At the time it said it had doubts about whether it was fully in line with EU State aid rules and wanted to ensure that "no more aid than necessary is ultimately granted. In particular, the Commission has doubts on whether the proposed package achieves an appropriate balance between reducing risks to enable the investment and maintaining incentives for efficient behaviour, while avoiding excessive risk transfer to the State".