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(News Analysis) S. Korea wins chance to become nuclear powerhouse with UAE deal

All Headlines 19:30 December 27, 2009

By Byun Duk-kun

ABU DHABI, Dec. 27 (Yonhap) -- South Korea took its first step toward becoming a major exporter of nuclear technology and reactors when it landed a deal potentially worth US$40 billion with the United Arab Emirates on Sunday.

The deal, signed shortly after a summit here between South Korean President Lee Myung-bak and UAE President Khalifa bin Zayed Al Nahyan, is initially worth $20 billion for the construction of four light water reactors, but is expected to generate contracts worth an additional $20 billion for the next 60 years for the plants' operation and maintenance.

The deal marked a historic first step for South Korea, as it is the first sale of the country's nuclear plants overseas, according to South Korean officials accompanying the president. With the deal, South Korea has become world's sixth exporter of nuclear power plants.

President Lee's trip here had marked the country's winning of the largest nuclear deal ever in the Middle East, but the Seoul government remained cautious until the very last minute.

Officials from the presidential office, Cheong Wa Dae, later noted Lee helped win a losing battle.

"The president held six telephone conversations with the UAE's Crown Prince Mohammed bin Zayed Al Nahyan before coming here, which apparently helped the country make a turnaround and win the contract despite imminent signs of a defeat," Cheong Wa Dae spokeswoman Kim Eun-hye told reporters.

The deal also marked a significant triumph for South Korean contractors, who landed the largest construction deal in South Korean history after fierce competition with the French nuclear group Areva, which currently controls 25 percent of the international market, they said.

Nearly half of the world's demand for nuclear power plants is met by the U.S. firm General Electric Co. (GE) and Westinghouse Electric Co., but GE was eliminated in the early stages of bidding. Westinghouse, meanwhile, joined the South Korean consortium led by the state-run Korea Electric Power Corp.

"It will be a milestone on the road to an era of South Korean nuclear power plants in the international community," Lee Dong-kwan, top public relations secretary for the South Korean president, said earlier of the significance of South Korea winning the UAE project.

Cheong Wa Dae spokeswoman Kim said the deal means the country has gone from being an importer of nuclear technology to an exporter.

Seoul built its first nuclear power plants in 1978 and has since built a total of 20 domestically, while localizing over 95 percent of the technology. An additional eight plants are now under construction in South Korea.

"The UAE deal means the country and its nuclear technology are finally recognized for what they are worth. It also means future contracts with other countries will come more easily," an official said, asking not to be identified.

The World Nuclear Association estimates that by 2030, the world will need 430 new nuclear power plants worth over $1 trillion.

The $20 billion deal with the UAE is equivalent to exporting 1 million passenger vehicles, while it is expected to create 110,000 jobs during the construction of the four reactors to be completed by 2020, according to the South Korean presidential office.

"South Korea's securing of the UAE project is expected to be a chance for the country to become a leading power of nuclear plant exporters ahead of conventional powerhouses of nuclear power plants in this era of a global renaissance of nuclear energy," it said in a press release.

Meanwhile, bilateral relations between South Korea and the UAE are expected to be further strengthened as decade-long construction of the nuclear power plants and following technology support will promote exchanges of manpower and goods in a significant scale between the two countries.

The UAE is currently second-biggest petroleum exporter to South Korea, following Saudi Arabia, and second-biggest importer of South Korean goods, following Iran, in the Middle East.


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