Cost overruns push S. Korea's nuclear project in UAE into the red

Barakah Nuclear Plant Unit 4 Courtesy of Korea Electric Power Corporation — The Barakah nuclear plant/ Courtesy of Korea Electric Power Corporation

SEOUL, August 19 (AJP) - South Korea’s flagship nuclear power venture in the United Arab Emirates has slipped into the red for the first time, underscoring the financial strains of the multibillion-dollar project once heralded as a cornerstone of Seoul’s ambitions to export nuclear technology.

According to Korea Electric Power Corporation’s first-half 2025 financial disclosures released Tuesday, the Barakah nuclear plant posted a cumulative loss of 34.9 billion won, or about $25 million, with its rate of return dipping to negative 0.2 percent.

Cumulative profit for the project, which had stood at 435 billion won at the end of 2023, fell to 72.2 billion won late last year before tipping into negative territory this summer. Returns slid from 2 percent in 2023 to 0.3 percent in 2024, before turning negative.

The four-reactor complex, South Korea’s first nuclear export project and one of its largest overseas construction contracts at roughly 22.6 trillion won ($16.6 billion), was originally slated for completion in 2020.

But repeated delays pushed back full commercial operations until 2024, when the fourth and final unit came online. The setbacks drove up costs and eroded profitability.

Korea Hydro & Nuclear Power, a KEPCO subsidiary responsible for providing operational support, has sought $1 billion in compensation for cost overruns tied to the delays and extra work orders.

In May, the company filed an arbitration case with the London Court of International Arbitration to recover part of those expenses.

KEPCO, for its part, has stressed that the Barakah project should not be judged solely on immediate financial results. Executives argue that the venture has bolstered South Korea’s reputation as a nuclear exporter and reinforced its domestic nuclear industry, while promising decades of future revenue through dividends from electricity sales over the plant’s 60-year lifespan.

Still, the dispute between KEPCO and Korea Hydro highlights unresolved tensions over who will absorb the additional construction costs, estimated at 1.4 trillion won.

KEPCO has set aside about 170 billion won in provisions — roughly 10 percent of the disputed sum — as negotiations with Emirati authorities continue.

Candice Kim candicekim1121@ajupress.com