South Koreans’ withdrawal from the competition over Lithuania’s new nuke

VILNIUS - It became clear why the Lithuanian government was so silent about the outcome of the competition to build the new Ignalina nuclear plant to replace the Soviet-built old one which is now dismantled, according to the treaty of Lithuania’s accession into the EU. South Korea’s Korea Electric Power Corporation (KEPCO) changed its mind and withdrew its proposal to build the new nuke in Ignalina.

On Dec. 3, Romas Svedas, Lithuanian vice minister on energy issues, held a short press conference.
“KEPCO presented a proposal, which met the conditions of the competition [to build the new Lithuanian nuke]. However, after two weeks KEPCO withdrew its proposal,” Svedas said. Earlier, the Lithuanian government planned to announce the strategic investor in the new nuclear plant’s construction by the end of this year. The new Ignalina nuclear plant is expected to be built by 2020.

“Such a situation was much unexpected by us. We put a lot of effort [into organizing the competition]. We have a lot of questions and no answers,” Svedas said. He stated that Lithuania will look for a new strategic investor via direct talks with the companies that are building nuclear reactors.

Earlier this year, the media speculated that the most probable investor could come from France. However, France, via its embassy in Vilnius, stated that French firms do not consider such a possibility. This could be caused by pressure from Russia as well as by unexpected French problems to complete their nuclear plant construction in Finland. It is worth mentioning that the French refusal came soon after the French-Russian deal over the sale of French Mistral war ships to Russia was signed.

There are two main versions explaining KEPCO’s refusal. Russian President Dmitry Medvedev visited South Korea in the beginning of November. It could be that due to senseless geopolitical games still played by the Kremlin (a kind of petty hooliganism), Moscow could propose to the South Koreans a much more profitable participation in some nuclear plant building projects in Russia, with the condition of non-participation in the project in Lithuania.

Another version is as follows: KEPCO found out that it is the only participant in the competition and, therefore, the South Koreans decided that they can get a much better deal for the new Ignalina in case of direct negotiations, not through the competition, although Lithuanian Prime Minister Andrius Kubilius did not guarantee such direct negotiations will go on with KEPCO.

“Direct negotiations will go on not necessarily with the Koreans,” Kubilius said on Dec. 3. KEPCO supplied its proposal for competition on Nov. 10. The withdrawal of its proposal took place on Nov. 24. Kubilius wrote a letter to the president of South Korea urging to push KEPCO to reconsider the withdrawal, but it did not help.

According to Jurgis Vilemas, the head of the Lithuanian Energy Institute, the South Korean refusal is not a big deal. He does not predict any geopolitical danger if Lithuania would not have its nuke, which raises doubts from a commercial point of view, because Lithuania will have its electricity supply connections with Sweden and maybe Poland and, probably in the future – alternative gas supplies from Poland. However, the Lithuanian government, as well as the governments of Latvia, Estonia and Poland (the project involves these four countries), have another point of view.

On Dec. 5, Lithuanian Prime Minister Kubilius, Polish Prime Minister Donald Tusk, Latvian Prime Minister Valdis Dombrovskis, and Estonian Prime Minister Andrus Ansip met in Warsaw to discuss energy security issues and the new Ignalina plant was one of them. The meeting took place on the initiative of Tusk. It was held on the eve of Medvedev’s visit of Dec. 6-7 to Warsaw. “It is the most important common project in the region,” Tusk said about the project of the new nuclear plant in Lithuania during the press conference of all four prime ministers after the meeting. The construction of the new Ignalina plant can cost some four to six billion euros.