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Czech court approves $18 billion nuclear power plant contract with KHNP

The Czech Court has lifted an injunction that prevented a state-controlled firm and South Korea's KHNP signing a $18 billion contract for building two new nuclear reactors. This allows the project to proceed.

The Supreme Administrative Court announced its decision on Wednesday. This means that the largest Czech procurement deal in history, as well as a crucial part of the country’s effort to replace older coal and nuclear plants, can be signed. However, it is still subject to court challenges, and there could even be a European Commission investigation.

Last month, France's EDF won an injunction against the tender from a lower-level court. This prevented the signing of the contract scheduled for May 7th. A ceremony was already planned and a Korean delegaiton had left for Prague.

The state-controlled EDU II and KHNP both appealed this ruling.

The court stated on Wednesday that it had listened to these complaints and found an injunction given by a lower-court illegal and unreliable.

The court stated that by canceling the preliminary injunction and issuing today's judgement, it lifted the prohibition on concluding contracts for the completion of public contracts for the construction of new nuclear power plants in Dukovany.

CEZ, a Czech power company, chose KHNP last year to build two 1,000 megawatt units for its Dukovany Nuclear Plant expansion. This was KHNP's first project in Europe. EDF has tried to reverse the decision in multiple ways.

In April, the government took 80% of the EDU II company that runs the project, while CEZ retained 20%.

CEZ, EDF and KHNP did not immediately comment on the ruling.

On June 25, the lower court that issued the injunction is scheduled to hear EDF's complaint about the tender.

EDF, which is the only European nuclear company, also sought to have KHNP’s winning bid annulled by the European Commission, citing competition reasons. They claimed that KHNP’s offer was too low and implied state aid. KHNP denies any state aid. Reporting by Jan Lopatka in Prague and Jason Hovet, Joyce Lee and Forrest Crellin, Paris. Editing by Alexandra Hudson.

(source: Reuters)