The European Commission has formally asked Czechia to postpone finalizing a contract with South Korea’s KHNP for the construction of two nuclear reactors at the Dukovany power plant, citing concerns over foreign subsidies that could violate EU internal market rules.
Some Czech officials, however, believe the move is motivated by the fact that the competing French company lost the bid.
In a letter sent to Czech Minister of Industry and Trade Lukáš Vlček, Commission Vice-President for Prosperity and Industrial Strategy Stéphane Séjourné said that the EU executive is preparing to launch an in-depth investigation into whether KHNP received financial support that could give it an unfair advantage.
“On the basis of the information provided, as well as other information revealed by the Commission services in the context of the preliminary review, there remain significant indications that a party (KHNP) has been granted foreign subsidies that may distort the internal market,” the letter, dated May 2, stated.
As reported by Echo24, the letter follows a preliminary review launched by the Commission under the 2022 Foreign Subsidies Regulation. As part of that process, the Commission had requested data from ČEZ Group, the Dukovany power plant, and KHNP, but reported that the responses had been insufficient. Despite stressing that no final conclusions have been made, the Commission is urging Czech authorities not to move forward with the contract until its investigation is concluded.
“The duty of sincere cooperation requires that the Czech Republic avoid any situation that would irreversibly contradict the concerns set out in this letter and that could have irreversible effects hindering the effective application of the FSR,” Séjourné wrote.
The project, valued in the billions of euros, was awarded to KHNP after a competitive tender in which France’s EDF was unsuccessful. However, the French company initiated legal proceedings that led to the Regional Court in Brno blocking the contract’s signing with a preliminary measure. The timing and authorship of the European Commission’s letter, sent late on a Friday night by a French commissioner, have sparked suspicions in Prague.
Environment Minister Petr Hladík publicly questioned the circumstances surrounding the letter but stopped short of making direct allegations. Foreign Minister Jan Lipavský told CNN Prima that diplomats were evaluating the document and must first become fully acquainted with its contents.
Daniel Beneš, CEO of Czech energy giant ČEZ, was more direct in his criticism. “The French will do everything to prevent such a power plant from being built,” he told reporters. “They are not interested in winning, but in preventing the power plant from being built here, and that is dramatic news for the Czech Republic.” He added that it was “hard to believe that there is an investigation going on when no one asks you anything” and called the process dubious. Beneš also said he believed Prague should reject the contents of the letter from the Commission.
A foreign ministry spokesperson told the Czech News Agency that the case initiated by EDF is being discussed between Czech and French officials, but declined to comment on the content of those talks, citing the need to preserve good relations.
Commission Vice-President Séjourné insisted that Brussels’ objective is not to obstruct the project. “On the contrary, our intention is to ensure legal certainty and ensure that the rules of our internal market are respected,” he wrote.
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