KEPCO Teams up with ENKA to
Bid for Turkish Nuclear Power Unit
The two firms set up a joint venture to land contracts in virgin nuclear market
Korea Electric Power Corp. (KEPCO) and the ENKA Group of Turkey have agreed to establish a $10-billion joint venture to bid for a contract to build Turkey's first nuclear power plants.
The deal raises the possibility that KEPCO, now a 30-year veteran of the construction and operation of nuclear power plants, could make an inroad into the Turkish nuclear power plant market, KEPCO officials said.
KEPCO said on May 16 that it signed the Joint Development Agreement (JDA) to win contracts to build nuclear power plants in Turkey. The Turkish government reportedly plans to determine by December the winner of a contract for the construction of a 5,000MW-class nuclear power unit by 2015.
ENKA Group has the country's largest construction company and the biggest power-generating companies as affiliates. It has built nearly half of Turkey's thermal power plants now in operation.
KEPCO will set up the joint venture with ENKA and set the bidding price next month before submitting the nuclear power plant bid in September.
KEPCO will shoulder $1.8 billion, accounting for 60 percent of the $3 billion paid-in capital of the joint venture and ENKA will fund the remaining $1.2 billion.
KEPCO and ENKA will finance $10 billion for their joint projects and $7 billion out of the total will be raised through investors from across the world. Societe Generale was selected as the financial advisor to raise the $7 billion.
If KEPCO lands the contract, the company will gain the proceeds from the operation of the planned nuclear power plant for 60 years as the largest shareholder of the joint venture.
Also participating in the bidding are companies from the United States, Japan, Canada, Russia, France and Germany.
KEPCO is more likely to win the bidding because the company has the experience and expertise accumulated in the course of the construction and operation of nuclear power plants now in operation in Korea, domestic industry sources said.
If KEPCO is awarded the Turkish nuclear power plant contract, it will be the fifth company in the world to export nuclear power technology abroad, and KEPCO's efforts to explore nuclear power markets in the United States, Indonesia, Ukraine and the Philippines will gain momentum, KEPCO officials said.
KEPCO has six thermal as well as hydro & nuclear power companies as its affiliates. The six power companies, including Korea Hydro & Nuclear Power Co., were spun off from KEPCO during the nation's restructuring of the domestic power industry in 2001.
KEPCO has accelerated its bid to explore foreign power nuclear power and thermal power markets.
KEPCO is credited with producing electricity with an international competitive edge, which is behind the breathtaking economic strides Korea has achieved so far. The competitive edge is owed to KEPCO's efforts to innovate in a wide range of areas from the receipt of electricity charges to the supply of materials, devices and logistics.
Taking a look into KEPCO's competitiveness, as of the end of 2006, KEPCO saw the power outage time standing at 18.8 minutes per household, which stands strongly in comparison with advanced countries. The figure is compared to 11 minutes for Japan, 138 minutes for the United States, 30 minutes for Taiwan, 68 minutes for the UK and 57 minutes for France. KEPCO has been recognized for keeping the regular voltage rate at 99.9 percent, the world's highest level. Even Taiwan, one of the global electricity powerhouses, has only registered a rate of 95.9 percent in 1999.
KEPCO's electricity loss rate is measured at 4.02 percent, lower than the 5.10 percent in Japan. The company goes the extra mile in lowering the electricity loss rate by taking steps to raise the power transfer and distribution voltages and introducing more efficient equipment and devices.
KEPCO is setting its sights on aggressively exploring foreign markets by securing the world's top quality electricity and services.
KEPCO strives to create new breadwinners from foreign markets with the goal of increasing the portion of revenues from the overseas front to 8.6 percent of its total revenues or approximately 3.8 trillion won by 2015.
BRISK OVERSEAS PROJECTS
KEPCO inked an MOU with Ukraine's ENERGOATOM on promoting cooperation in the design, launch, operation and technical servicing of nuclear power plants (NPPs) in September 2007. A six-member Ukrainian delegation, including Oleksandr Rybchuk, director general in charge of new business at ENERGOATOM, visited such Korean NPP-related companies as KHNP, KINS, Korea Nuclear Fuel Co. and Doosan Heavy Industries from September 9-15, 2007.
KEPCO's signing of an MOU with ENERGOATOM is designed to materialize collaboration between the two companies following an MOU inked between the Korean and Ukrainian governments in June 2007 when a Korean delegation visited Ukraine.
Earlier, KEPCO teamed up with GE Energy to make a joint entry into overseas markets with the American powerhouse. Ex-KEPCO Chairman-CEO Lee Won-gul and his counterpart GE Energy President James Suciu inked the agreement at the Fairmont Hotel in San Francisco on August 7, 2007.
Under the agreement, KEPCO and GE Energy agreed to strengthen collaboration between the two companies on the implementation of new overseas projects as well as ongoing ones.
The second Korean-Chinese forum on nuclear power, hosted by the Ministry of Commerce, Industry and Energy and the Science, Technology and National Defense Industry (COSTIND) in Shanghai on April 24, 2007, offered in-depth discussions on the development of the Korean and Chinese nuclear power industries. It was organized on the Korean side by KEPCO and Korea Hydro & Nuclear Power Co. and on the Chinese side by China National Nuclear Corp. (CNNC) and China Guangdong Nuclear Power Holding Co. (CGNPC).
The forum, designed to exchange information on the overall status of the Korean and Chinese nuclear power industries, was held two years after the inaugural forum was held in Seoul on June 23, 2005, according to an agreement reached in December 2004 between the visiting MOCIE minister and his Chinese counterpart.
Korea has been aggressively striving to enter the Chinese nuclear power market, which is projected to grow in the years to come to meet the skyrocketing demand for power.
KEPCO has been recognized for its excellent project management capabilities and world-class electric technology prowess as it has successfully implemented projects in such countries as China, the Philippines, Lebanon and Nigeria since the mid 1990s. nw
KEPCO Chairman Lee Won-gul shakes hands with ENKA Group Chairman Sinan Tara after signing the Joint Development Agreement in Istanbul on May 16.