EU: 75 Million ECU for North Korean Nukes

Nuclear Monitor Issue: 
#474
13/06/1997
Article

(June 13, 1997) On May 15, the European Union agreed to join the international KEDO consortium. KEDO (Korean Peninsula Energy Development Organization) is the contractor for the construction of two light water reactors to be built in North Korea.

(474.4700) WISE Amsterdam -An agreement for the construction of the two reactors was signed in 1994. It was the result of long negotiations between the United States and North Korea, after suspicion arose that North Korea was developing a parallel military nuclear program. North Korea promised to freeze and dismantle its indigenous nuclear program and allow IAEA inspections, and KEDO promised to supply two Light Water Reactors and 500,000 metric tons of heavy fuel oil per year for heating and electricity. (see WISE NC 445.4409)

After formal approval by the EU foreign ministers, the European's Atomic Energy Community (Euratom) will become an executive board member of KEDO. The other board members are the US, South Korea and Japan. General members of KEDO are Australia, New Zealand, Canada, Indonesia, Finland, Argentina and Chile.

The 15-country European Union's membership in the KEDO had been expected for some months. It was first announced in March by KEDO's executive director, Stephen Bosworth.

The European Union agreed to pay 75 million ECUs (US$86 million) in the coming five years for the project. The whole project of constructing the two 1000-MW reactors is to cost an estimated US$4.5 billion.

A spokesperson for the EU Trade Commissioner said it is a deal of "enormous political and financial significance. It shows for the first time that we do not only have a commercial interest in East Asia but a strategic interest to promote peace and security there." However, the agreement means that the industry of the EU countries have more possibilities to compete for the entire US$4.5 billion on contracts.

Ground-breaking for the project has been postponed several times due to continuous political tension between the two Koreas. The IAEA is not happy with the cooperation of North Korea either. Hans Blix, the director general, said that "in regard to the freezing of the nuclear facilities, North Korea has been cooperative, but there has been no progress in securing information" (on the operations of the nuclear reactors).

Sources:

  • Reuter, 21 & 22 May 1997
  • Korea Herald, 10 October 1996