Hyundai E&C was chosen to construct the new blocks of the Kozloduy Nuclear Power Plant using Westinghouse's AP1000 technology. This decision followed a tender where Hyundai E&C was one of five companies expressing interest in the project. What were the specific qualifications and experience that distinguished the company from its competitors for this project?
There are several key factors. Hyundai E&C has specialized in the construction of nuclear power plants for 54 years - starting with the construction of Korea's first nuclear power plant, the Kori NPP, in 1971, using Westinghouse technology. We have vast experience in designing nuclear power plants, with a total number of 24 blocks - 17 completed in South Korea and 3 in the Barakah NPP in the UAE, 3 under construction in South Korea, and 1 under construction in the UAE. This indicates the staffing capacity of Hyundai E&C, which allows us to undertake simultaneous projects for building up to 10 nuclear blocks.
Bulgaria is on its way to becoming the first country in Europe with an AP1000 reactor, and accordingly, the need for reliable partners is of paramount importance. In this regard, I believe that the construction capabilities of Hyundai E&C, together with our rich experience in fulfilling our commitments to clients, are the most distinctive factors compared to our competitors.
It is also important that Hyundai E&C executes most of its projects under conditions to be completed within a fixed contract period and at a fixed price. An example of this is the Barakah NPP in the UAE, where the four blocks were simultaneously under construction with the participation of more than 20,000 employees. All blocks are built in full compliance with the agreed contract price and completion time with the client. From them, the first three blocks were successfully completed in phases, and the last is moving towards its planned final stage of completion.
Moreover, Hyundai E&C is financially stable, supported by a portfolio covering all sectors, including power generation, infrastructure, construction activities, factories, and development projects. This foundation allowed us to exceed the financial requirements for the Kozloduy NPP project, including the required revenue and net profit data.
Hyundai E&C's total revenues last year were $22.7 billion, and the new orders were worth $69.6 billion.
And of course, the partnership with Westinghouse Electric Company. As I mentioned, it began back in 1971 with the construction of the First Block of the Korean Kori NPP. In May 2022, we further solidified this partnership by signing a Strategic Cooperation Agreement for projects with American AP1000 technology. In the Barakah NPP, we have been working together with Westinghouse since 2010, with Hyundai E&C as the contractor and Westinghouse as the main equipment supplier.
What is the significance of this project for Hyundai E&C, and what are the broader goals of the company?
This project is extremely important for us, and we have set ourselves 2 key objectives. First - to establish Hyundai E&C as a provider of comprehensive solutions for nuclear power plants. Hyundai E&C plans to collaborate with leading players in the nuclear industry to create a comprehensive nuclear value chain covering large-scale nuclear power plants, as well as small modular reactors (SMR), decommissioning of nuclear facilities, and processing of used nuclear fuel.
And second - we consider our participation in the Kozloduy NPP project as an important step towards our full entry into the Bulgarian market. Through this project, we will identify local companies and talents with whom we will gladly share our technologies and experience. We will establish stable partnerships and a business presence at the local level, promoting industrial growth in the country. Moreover, we will stimulate the development of various sectors, including infrastructure, construction, and energy in Bulgaria.
Additionally, our important goal with the Bulgarian project is to lay solid foundations for our activities in Bulgaria and, in the future, to carry out projects in the EU using the resources of our local office and our Bulgarian partners.
What specifically makes the Kozloduy Nuclear Power Plant preferred for Hyundai E&C?
The site for blocks 7 and 8 at the Kozloduy Nuclear Power Plant has already been constructed near the existing operational reactors. Therefore, we expect that the use of these facilities will save cost and time. Moreover, the availability of cooling water from the Danube River provides a strategic advantage, while the long-term operation of existing facilities has already confirmed the safety of the site, making it exceptionally suitable for the project. The availability of both water and land transportation routes provides favorable conditions for transporting oversized equipment and materials to the site.
Considering the strict requirements, including experience in construction, commissioning of at least two nuclear blocks, and solid experience in the sectors of nuclear and turbine technologies for power blocks, what are the challenges Hyundai E&C expects to face during this project, and what strategies are planned to overcome them?
Based on our rich experience with 24 projects in various nuclear power plants and particularly our recent experience with the four blocks of the Barakah NPP in the UAE, Hyundai E&C is ambitious to successfully complete the Kozloduy project. Moreover, considering our partnership with Westinghouse since 1971, we have no doubt about our overall success. However, considering that this will be Hyundai E&C's first step in Bulgaria with a significant project, as well as that local companies face the challenging task of overcoming a 30-year lack of experience in building nuclear power plants, we consider this discrepancy as one of the key challenges in the future. Nuclear power plants must meet the highest quality and safety standards, making experience absolutely necessary.
Localization of operations is crucial to overcoming these challenges-to reduce the risks associated with entering the local market. And creating mutually beneficial partnerships with talented Bulgarian companies and employees will lay a solid foundation for stable execution.
After Hyundai E&C is chosen as the contractor, we plan to enter into dialogue with proven local companies and teams during the preparation period and to proactively share our accumulated experience and technology.
Hyundai E&C has already signed a memorandum of understanding with Glavbolgarstroy, the largest construction company in Bulgaria, and will strive to maximize the participation of Bulgarian companies and citizens for the successful completion of the project.
The Bulgarian Parliament has set specific requirements for the project, such as a fixed price and a 60-month period for the construction of the first block with the significant participation of Bulgarian contractors. Is this a feasible timeline, and how does Hyundai E&C plan to meet these ambitious requirements?
We are confident in our ability to handle the challenging task of completing the first block within a fixed price and 60-month construction period. Firstly, we will work closely with Westinghouse to develop an engineering action plan and thoroughly assess the competitiveness of the price proposal. Additionally, we will enhance our competitiveness by cooperating with global and local partners during the preparatory phase of construction.
We are determined to support local business development, having already established exclusive partnerships with leading Bulgarian construction firms. In the future, we will expand these partnerships, prioritizing collaboration with key local firms.
The expectations of the client and Bulgarian stakeholders regarding the fixed price of the project are quite ambitious. Therefore, securing competitive financing will be crucial for the success of the project. South Korea possesses state-supported financial institutions with global competitiveness, such as the Korea Export-Import Bank (KEXIM) and the Korea Trade Insurance Corporation (K-Sure). In the past, KEXIM provided over $3.1 billion in support of our project at the Barakah NPP in the UAE.
Last year, during an event dedicated to the partnership between Korea and the USA for industry development and clean energy, Hyundai E&C signed a financial support agreement with K-Sure to explore global nuclear projects. We have also established a strategic partnership with KEXIM, laying the groundwork for enhanced cooperation in the nuclear industry through establishing a multilateral support system with public financing agencies.
The cooperation between the export credit agencies of the USA and South Korea has significant potential for synergy, and Hyundai E&C is committed to attracting financial support to ensure the success of the project.
How many workers will be required for this project?
Although the specific scope of the project's work is yet to be determined, we currently expect to engage about 10,000 workers at the site during peak construction activities. Based on our experience at the Barakah NPP, where we managed construction activities with more than 20,000 workers at peak times, we are well-prepared to manage such a large-scale process with thousands of workers and ensure the successful completion of the project.
Can you describe the projected economic impact of the new capacities at the Kozloduy Nuclear Power Plant on the local and national economy throughout the construction period?
Firstly, the construction stage of the nuclear power plant will create numerous new employment opportunities, thereby contributing to an increase in income and economic development in Bulgaria. Additionally, Hyundai E&C intends to train highly skilled personnel for building a nuclear power plant through special educational and training programs. Specifically, we plan to popularize our employment-related educational program in collaboration with Bulgarian universities. Internship programs and job placement programs will be conducted to assist Bulgarian students in finding jobs and acquiring skills in nuclear construction. Moreover, we plan to employ talented personnel who pass these programs, engaging them both in the Kozloduy NPP project and at Hyundai E&C's headquarters.
Additionally, to train a professional workforce, we will establish a technical school during the construction phase of the new capacities and transfer technologies through various educational programs.
Hyundai E&C is committed and actively seeks proven local companies during the preparatory stage of construction, striving to promote overall development through technology transfer during the construction phase. This initiative will pave the way for establishing medium to long-term partnerships, allowing us to explore additional partnership opportunities in Bulgaria, including in nuclear power, infrastructure, construction, and factories both in the country and abroad.
Inspired by the hospital facilities at the Barakah NPP site in the UAE, Hyundai E&C intends to build and provide modern and highly specialized medical facilities in Kozloduy, which will serve both construction participants and residents in the region throughout the construction period. After the completion of the project, these facilities will be handed over to local authorities, inevitably improving medical services in the Kozloduy region.
Furthermore, we plan to create a bicycle path along the Danube River to improve the well-being of the city for local residents and construction workers on the project, offering better travel opportunities to the workplace and for making use of free time.
To address educational needs in the Kozloduy region, we plan to open a Public Communications Center, which will offer training in Korean and English languages. It will be staffed by translators and a team hired by the company. This initiative aims not only to expand employment opportunities within our project with the Kozloduy NPP but also to provide opportunities for personal development to the local community.
It seems that Hyundai E&C views this project as a sign of the revival of South Korea's nuclear industry. How does this project align with the company's plans, and what is the expected impact on South Korea's nuclear industry, especially in light of changing government policies towards nuclear energy?
The full support of the Korean government for the nuclear energy industry through the K-Nuclear Power Plant Drive, combined with Hyundai E&C's recent success in winning the project for Blocks 3 and 4 of the Shin Hanul NPP, marks significant progress for Korea's nuclear energy sector. Meanwhile, Bulgaria's pioneering introduction of AP1000 technology in Europe through the Kozloduy project will open a new chapter in global nuclear history.
As the nuclear industries of both countries reach a turning point simultaneously, we expect significant changes, especially for Korea. The project will provide opportunities for enhanced cooperation between the two governments, which may lead to positive outcomes such as strengthening economic ties and bolstering relationships across various sectors.
