The European Commission (EC) has called on the Czech Republic to postpone signing the contract with Korea Hydro & Nuclear Power (KHNP) for the construction of two new nuclear units at the Dukovany NPP. The EC is currently investigating whether the South Korean firm has received foreign subsidies that could distort competition and the EU’s internal market, according to a letter sent to Czech Industry & Trade Minister Lukáš Vlček by French EC Vice-President Stéphane Séjourné.
In July 2024, a South Korean consortium led by the state-run KHNP was selected as the preferred bidder for the construction of up to four new NPP units at the Dukovany and Temelín sites, with two reactors (units 5&6) confirmed for Dukovany. The total project cost was then estimated at approximately CZK200bn ($9bn) per unit. Completion of the first reactor is scheduled for 2036.
KHNP won the tender against both US Westinghouse and France’s EDF. Both companies appealed to the Czech Republic’s competition authority (UOHS – Úřad pro Ochranu Hospodářské Soutěže) about the selection process. Westinghouse later withdrew its appeal and EDF’s was rejected by the competition office in April.
EDF subsequently filed a complaint against UOHS with the Regional Court in Brno, which ruled that ČEZ could not sign the contract until EDF’s complaint had been dealt with. Czech Prime Minister Petr Fiala nevertheless approved the signing of the contract in principle. “The Czech Republic must be as energy self-sufficient as possible,” he said. The Czech cabinet has granted preapproval for the contract, enabling it to be signed as soon as the legal injunction is lifted, without requiring a separate cabinet vote. In addition, 12 agreements on future contracts were signed by representatives of Czech and Korean companies.
Séjourné, in his letter, draws attention to the new EU regulation on foreign subsidies, which enables investigations into the impact of state aid from non-EU countries on the European market. The EC can temporarily block large public contracts if it suspects that a bidder may have been unduly favoured by foreign financial support. In the case of KHNP, there are concerns that it may have received state aid that would have allowed it to bid more favourably than its competitors. The EC is therefore asking the Czech Republic to wait to sign the contract until the vetting has been completed.
“We received the letter from the French commissioner, and we are currently evaluating it and preparing a response,” said Industry Minister Vlček in an interview with the Czech Television. He noted that the letter “reflects the views and comments of EDF”, adding: “We will respond accordingly.” He noted that “it is no coincidence” that the letter came from a French EC official.
In an angry response, ČEZ CEO Daniel Beneš said the who thing is questionable. “It’s hard to believe that an investigation is underway when no one asks you anything. The French will do everything to ensure that this power plant is not built. They are not interested in winning, but in the fact that the power plant will not be established here, and this is a dramatic message for the national security of the Czech Republic.” Beneš also noted that the letter is dated 2 May and that Vlček should respond soon. “But I am convinced that what is in the letter should be rejected by the Czech Republic.”
CTK, citing “a person close to the European Commission speaking on condition of anonymity”, said: The French are trying to do everything in their power to avoid signing the contract and are probably using their allies in the European Commission to do so. The goal is to derail the signing process. Given that the Korean company KHNP and the French EDF were in the final of the tender, if the Commission managed to eliminate KHNP, it would receive a tender from France. Even thwarting the whole tender is a better result for them than if Dukovany is built without them.”
According to the source, it is also strange that the letter was written by the European Commissioner himself, because it is usually done by lower-ranking officials. “The fact that the letter was sent by the commissioner means that the whole thing is politicised.” This same sentiment was expressed by Czech Environment Minister Petr Hladík.
However, EC spokesman Thomas Regnier dismissed allegations that Séjourné was defending French interests. “This is not a French European Commissioner who defends French interests, but a member of the College of the European Commission who enforces legislation and cooperates with the Czech authorities in protecting our single market,” he told Czech journalists. He added that The EC had already sent a request for information to the Czech Republic in February, but did not receive a reply.
Regnier insisted that the letter was not a request to suspend the contract despite the fact that the letter was entitled: Request for immediate steps to suspend the signing of the contract for new nuclear reactors in Dukovany .
French Ambassador Stéphane Crouzat, who has been working in the Czech Republic since 2024, says it legitimate for EDF to defend its interests. After all, he means that this is not unusual for such a large-scale project. According to Crouzat, EDF appealed in the interest of the EU and the Czech Republic itself to determine whether or not the winning bid is contrary to the rules of fair competition and legislation.
The EC investigation concerns compliance with the 2022 Regulation on foreign subsidies (FSRs) distorting the internal market. “The obligation of loyal cooperation requires the Czech Republic to avoid any situation that would be irreversibly contrary to the concerns raised in this letter and which could have irreversible effects preventing the effective application of the FSR,” the letter said.
