Talks between South Korea and the United States over a prospective $200 billion investment package are encountering significant hurdles, particularly concerning nuclear energy projects and financial commitments. As discussions continue, these unresolved issues cast doubt on the finalization of the agreement.
The negotiations are primarily snagged by disagreements over nuclear reactor designs and the timing of South Korea’s financial contributions. Both nations are considering the development of eight nuclear reactors in the U.S., with six potentially utilizing Westinghouse’s AP1000 design and two employing South Korea’s APR1400 technology. However, U.S. officials and Westinghouse have expressed reservations about including the Korean-designed APR1400, complicating the project’s trajectory.
South Korea is also negotiating for a 15% to 20% stake in Westinghouse, complete with voting rights and a board seat, while Westinghouse is reportedly aiming to limit South Korea’s ownership to below 10%. Additionally, Seoul has shown interest in participating in a U.S. project focused on processing spent nuclear fuel and is contemplating involvement in an Alaska liquefied natural gas project, despite concerns over costs and returns.
Funding timelines are another point of contention, with the U.S. requesting over $9 billion from South Korea by the end of the year. In contrast, South Korea initially planned to provide a smaller sum in 2026, with increased investments slated for 2027. Disagreements also persist over how to calculate investment returns, with South Korea advocating for profits from successful projects to offset losses from others, a method the U.S. has resisted.
Under a proposed framework, the U.S. would receive 90% of net profits after principal and interest recovery. South Korea has raised concerns that this approach could result in the U.S. benefiting from profitable ventures while it bears the brunt of losses from unsuccessful ones. Despite these challenges, both governments remain engaged in discussions to iron out the details of the investment arrangement, with South Korea’s Industry Ministry emphasizing that no final decisions have been made regarding the projects, funding structure, or investment specifics.