Czechs can sign $18 billion nuclear power deal after EDF appeals rejected

By Jan Lopatka and Jason Hovet

PRAGUE (Reuters) -The Czech Republic's competition authority has cleared the way for the signing of contracts with South Korea worth at least 400 billion crowns ($18 billion) for two new nuclear power units after it rejected appeals by EDF of France, it said on Thursday.

The decision by the UOHS competition authority on Thursday confirms an earlier verdict that EDF appealed after it lost out to South Korea's KHNP in the tender last July.

It means the signing of contracts for two 1,000-megawatt units at the Dukovany nuclear power plant in what will be country's largest energy investment to date can go ahead.

"There is nothing at this point that prevents (CEZ subsidiary) EDU II from concluding a contract with the preferred bidder KHNP," Chair of the competition authority Petr Mlsna told a news conference.

He said the decision invalidated an injunction that had prohibited any contracts being concluded.

While a setback for EDF, the construction would give KHNP a presence in Europe and would be a major breakthrough for the Czech Republic that has tried for more than a decade to pick a builder to expand its nuclear power fleet.

KHNP welcomed Thursday's decision and said it was working to finalise contract details with CEZ, which is 70%-owned by the Czech Republic.

EDF had no immediate comment.

Apart from the appeals, the contracts, which could be worth even more when inflation is included, have been held up by political turmoil in South Korea and talks on how much of the construction work would go to Czech firms.

Nuclear is expected to provide half of the country's generation mix in the future, up from around a third now, as the country phases out coal in the coming decade.

CEZ aims to start construction of the first new nuclear power unit later this decade, with expected completion in 2036.

The project was originally planned for one unit, to be supported by soft loans from the government as well as a power purchasing scheme for electricity from the new units.

The tender in July last year left the option for further units later.

While CEZ has said it could not take financing two units on its books, local media have reported the government may take a larger role, possibly by buying a direct stake in CEZ's subsidiary in charge of the project. The European Union has to sign off on the amended financing plan that has yet to be published.

($1 = 21.9510 Czech crowns)

(Reporting by Jan Lopatka and Jason Hovet; editing by Barbara Lewis)