Barakah: delays sank Korea's first nuclear export, builders sued each other

In 2009 a 'Team Korea' consortium led by KEPCO won the contract for the UAE's Barakah nuclear power plant, South Korea's first reactor export and one of its largest overseas construction deals at roughly ₩22.6tn ($16.6bn). Four APR-1400 reactors were to be built in the desert at Barakah, originally slated for completion in 2020, with KEPCO as prime contractor and its subsidiary KHNP supplying the reactors.

Repeated delays pushed full commercial operation to 2024, four years past plan. The setbacks — construction rework including containment-building concrete cracks and slow first-time licensing — drove up costs and eroded profitability. The additional construction costs were estimated at around ₩1.4tn ($1bn), and the contract left no agreed answer for who would absorb them.

In May 2025 KHNP filed for arbitration against its own parent KEPCO at the London Court of International Arbitration to recover part of the money. By August 2025 KEPCO's half-year disclosures showed the Barakah project had tipped into the red: cumulative profit of ₩435bn at end-2023 had become a ₩34.9bn loss, with returns falling from 2% to negative 0.2%. KEPCO had provisioned only ₩170bn, about 10% of the disputed sum.

Cumulative project profit of ₩435bn turned into a ₩34.9bn loss by mid-2025; ~₩1.4tn ($1bn) in extra costs disputed at the LCIA.

The export contract left allocation of delay and change-order costs unresolved between the parent and its subsidiary.

First-of-a-kind construction abroad: concrete quality failures and a new regulator's licensing process added years.

Both firms are state-run, so the dispute became a domestic political problem rather than a settled commercial matter.

Profit recognition assumed timely completion; each year of slippage eroded the return until it went negative.

Sign a fixed-price megaproject abroad and the real fight starts at the first delay: settle who pays for late design changes up front, or the contract ends in arbitration.

In February 2026 Seoul's trade ministry publicly advised KEPCO and KHNP to pull the case out of the London Court of International Arbitration and settle it at the Korean Commercial Arbitration Board; a month later the two companies reached a preliminary agreement to do so. Korea also weighed restructuring its nuclear export system to put KHNP in sole charge, while KEPCO continued negotiations with Emirati authorities over recovering the extra costs.