South Korea’s Ministry of Trade, Industry and Energy has outlined a strategic framework that creates a path for its APR1400 nuclear reactor technology to enter the US market, although the execution timeline remains undecided.
This relates to a $120bn investment programme to construct eight large-scale nuclear reactors on US soil. Phase 1 begins with the engineering, procurement, and construction (EPC) contracts for two Westinghouse AP1000 reactors. Phase 2 introduces two South Korean-designed APR1400 reactors alongside two additional AP1000 reactors. Phase 3 concludes with the final two AP1000 reactors.
The $120bn strategic framework is part of the $350bn trade-and-investment deal between South Korea and the US signed in November 2025 which represents a compromise to shield the South Korean economy from crushing tariffs imposed by President Donald Trump. Washington agreed to lower reciprocal tariffs on South Korean products from a threatened 25% down to 15%. In exchange, President Lee Jae Myung committed to inject $350bn into the US economy. This included the Strategic Industries Cash Fund ($200bn) earmarked for direct cash capital deployments in advanced technologies, energy infrastructure, and manufacturing. The $120bn comes under this funding.
Washington formally tabled the specific proposal to direct $120bn of South Korea’s previously pledged cash toward constructing eight large-scale nuclear reactors in August. Contentious negotiations followed as Korea pressed for inclusion and early construction of its APR1400 design while the US insisted on prioritising the AP1000. In addition, South Korea is seeking to securing a stake in Westinghouse to better secure its involvement in the projects, but is facing pushback from the company. However, Korea did secure as $20bn cushion against cost overruns in building the eight reactors. If Korea completes the reactors within the set budget and schedule, the money it does not spend would still be credited as Korean investment in the US.
The APR1400 projects still require site-specific development, including evaluations of location and economic feasibility. While the government referenced a six-month period, officials said this is not a firm deadline for signing but represents the intended operational interval between finalising Phase 1 (the initial Westinghouse units) and moving into the Phase 2 EPC contracts that include the Korean design.
The two sides agreed to make “reasonable efforts” to limit that interval to six months. The timing is significant because delays in follow-on contracts could affect procurement and preparations for equipment with long manufacturing lead times. The Industry Ministry said production and delivery can take 54 months for reactor vessels, 57 months for steam generators and 65 months for reactor coolant pumps and motors.
According to the Industry Ministry, the basic plan calls for reactors to be built on US federal land designated by the US, but that South Korea would be permitted to request an alternative location. Project costs and economics could vary depending on soil conditions, access to water, distance from electricity consumers and required transmission-grid construction.
The Korean government has discussed making an initial payment of up to $10bn by the end of the year, to secure long-lead equipment in advance rather than paying cash directly to the US, with the aim of increasing participation by South Korean companies. It has not specified how this would be divided between the AP1000 and APR1400 programmes.
Industry Minister Kim Jung-kwan stressed that the framework agreement does not guarantee immediate project commencement. Specific conditions – such as physical sites, final project corporate structures, and construction schedules – must face commercial-reasonableness reviews and pass National Assembly procedures before individual projects transition into binding orders.
In March, the National Assembly passed the Special Act on the Operation and Management of Strategic Investments between the Republic of Korea and the United States with a bipartisan landslide of 226 votes in favour. This law provides the official domestic legal backing required to execute the broader $350bn trade-and-investment package.
The law introduces a strict financial screening mechanism designed to protect South Korean public funds from taking on toxic or purely political financial risks in the US market. It divides projects into two clear categories. “Commercially Reasonable” projects and “Strategic or Unprofitable Projects”.
If a state-backed body reviews a project and proves it is highly likely to turn a profit, the South Korean government does not need formal parliamentary approval. Instead, the Industry Ministry is only legally required to deliver an official briefing or report detailing the project to the National Assembly.
However, if a project lacks standalone commercial viability but the government still wants to proceed because it secures critical technology supply chains or satisfies a core national security mandate, the law strips the executive branch of solo authority. The government must secure formal, explicit consent from the National Assembly before they are legally permitted to begin formal project talks with the US.
This clause was a heavily fought-for concession pushed by South Korea’s opposition lawmakers during the drafting of the bill. Lawmakers were concerned that, under pressure from Washington to move faster on spending the money, South Korea’s state apparatus would be forced to bail out or subsidise failing, high-cost American energy or mineral projects.
By forcing an explicit vote on non-commercial projects, the National Assembly ensured that any project draining South Korean capital purely for geopolitical compliance, without realistic commercial returns, must face full public scrutiny, fiscal impact evaluations, and a recorded vote. To manage these strict boundaries, the law authorised the launch of a dedicated state entity – the Korea-US Strategic Investment Corporation (KUIC) – backed by KRW2,000bn ($1.5bn) in foundational capital. The KUIC serves as the baseline evaluator, strictly auditing each pipeline project before deciding whether it can pass under a standard briefing track or if it must face a legislative vote on national security grounds.
The agreement therefore creates an opportunity for the APR1400 to enter the US market but does not constitute a reactor order. The extent of the project’s impact will depend largely on how quickly the second-stage contracts involving the South Korean reactor design are finalised. In the meantime, a $20bn gas project in Texas under the $200 fund has been confirmed after US officials criticised Seoul for moving too slowly on its investment and threatened higher tariffs.
Meanwhile, negotiations for Korea to take a 5-10% stake in Westinghouse continue. The financial aspect of the deal has become a major point of debate within the South Korean parliament due to a surging valuation. Westinghouse filed confidentially for an Initial Public Offering (IPO) led by Wall Street banks such as Goldman Sachs and Citigroup. As a result, the target enterprise value for Westinghouse has shot up to over $50bn, which means a 10% stake would force South Korea to inject up to KRW7,000bn ($5.3bn).
South Korean lawmakers are questioning whether this is an overpayment for a company that was in bankruptcy less than a decade ago. To make the price more palatable, negotiators are trying to finalise an agreement where South Korea can purchase common stock with voting rights at a 10% discount compared to the final public offering price.
Despite the high price tag, Seoul views a minority stake as a vital “control device”. Even a single-digit stake with voting rights gives South Korea leverage. It provides a structural safeguard to resolve ongoing, multi-billion-dollar royalty disputes and restrictive export rules that have historically blocked South Korea from bidding on nuclear contracts in Europe and the Middle East without US sign-off.
To keep this from draining public money, the government intends to set up a joint Special Purpose Company. KHNP’s financial exposure will be kept to a minimum, with the bulk of the 5-10% buy-in funded by South Korean private equity and private nuclear supply-chain corporations. However, critics warn that taking on a stake exposes South Korea to massive financial and operational liabilities if US reactor construction suffers from its typical multi-year delays and multi-billion-dollar cost overruns.
