Shin Hanul 3·4 Auxiliary Equipment 'Immediate Contract' 30% Deposit Payment

The Ministry of Trade, Industry and Energy announced on the 10th that it will implement a 'special advance payment' system to provide early payment of 30% of the total contract amount immediately upon signing the auxiliary equipment contract for Shin Hanul Units 3 and 4, in order to resolve the financial difficulties faced by nuclear power equipment companies.

Until now, even if equipment companies signed supply contracts with Korea Hydro & Nuclear Power (hereinafter KHNP) in nuclear power construction projects, it was difficult to receive payment until the year the actual delivery was made. This is because auxiliary equipment for nuclear power plants typically takes 2 to 3 years from contract signing to first delivery, and current national contract laws and subordinate regulations stipulate that advance payments are to be made in the year the supplier fulfills the contract (delivery).

An official from the Ministry of Trade, Industry and Energy stated, "For this reason, nuclear power companies whose sales sharply declined during the phase-out period faced limitations where short-term financial concerns were not resolved even if they secured new auxiliary equipment orders. Especially, small and medium-sized enterprises that have exhausted their credit and collateral limits and find it difficult to receive financial support from commercial banks are in urgent need of early advance payments as down payments."

To address these difficulties in the nuclear power industry, the Ministry of Trade, Industry and Energy, after intensive consultations with related ministries, established the special advance payment system to allow advance payments immediately upon contract signing for equipment orders supplied to the nuclear power ecosystem during the construction of Shin Hanul Units 3 and 4. Accordingly, KHNP will establish detailed operational guidelines to enable payment of up to 30% of the total contract amount as an advance payment to companies that have signed auxiliary equipment supply contracts, and will fully implement this from the 11th.

An official from the Ministry of Trade, Industry and Energy said, "With the implementation of the special advance payment system applied to auxiliary equipment for Shin Hanul Units 3 and 4, advance payments to small and medium-sized nuclear power companies will expand, and it is expected that more than 1 trillion won will be disbursed for Shin Hanul Units 3 and 4 funds by the first half of next year."

Exterior view of Shin Hanul Units 1 and 2. (File photo)

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