Amid ongoing discussions between South Korea and the United States, significant challenges remain in finalizing a landmark agreement concerning Seoul’s anticipated $200 billion investment in U.S. infrastructure projects. Central to these talks are disagreements over nuclear power projects, investment risks, and funding schedules, which have stalled progress.
The discord primarily revolves around the selection of nuclear reactor designs and the financial commitments associated with them. The two nations have been negotiating the construction of eight reactors in the United States, with six based on Westinghouse’s AP1000 design and two employing South Korea’s APR1400 technology. However, U.S. officials, including those from Westinghouse, have expressed opposition to the inclusion of the Korean-designed APR1400 reactors. This resistance complicates the potential allocation of approximately $120 billion of South Korea’s pledged investment towards nuclear-related endeavors.
Further complicating the negotiations is South Korea’s interest in acquiring a 15% to 20% stake in Westinghouse, complete with voting rights and a board seat. Westinghouse, however, reportedly wishes to cap Seoul’s ownership below 10%. South Korea is also contemplating participation in a U.S. project for processing spent nuclear fuel and has shown interest in a proposed liquefied natural gas project in Alaska, though concerns about construction costs and returns persist.
Timing and financial arrangements add another layer of complexity. The United States has requested that South Korea contribute over $9 billion by the end of the current year. In contrast, South Korea had initially planned to start with a smaller investment in 2026, ramping up contributions from 2027 onwards. The two sides are also at odds over how to calculate returns, with South Korea advocating for a system where profits from successful projects offset losses from others, a method the U.S. does not favor.
Despite these challenges, both countries remain committed to continuing negotiations. South Korea’s Industry Ministry has stressed that discussions are ongoing and that final decisions regarding the projects, funding structures, and investment arrangements have yet to be reached. As talks proceed, the outcome of this significant bilateral investment initiative hangs in the balance, with both nations working to bridge their differences.