Czechia asks European Commission to approve state aid for construction of units at Dukovany

The Czech Republic today formally asked the European Commission (EC) to approve the planned state aid for the construction of two new nuclear units at Dukovany. The state intends to finance construction through a state loan to Elektrárna Dukovany II, in which it has held a majority stake since this year. The Ministry of Industry and Trade (MPO) informed the Czech News Agency (ČTK) in a press release. The ministry expects a decision on the notification, which is essential to securing financing for the project, by the end of next year.

The state previously obtained the EC’s approval for state aid for the planned construction of one unit. However, after the decision was made to build two units, it had to submit a new application. During the notification process, the Commission will assess whether the proposed aid complies with EU rules.

The construction of new nuclear units in Czechia is expected to be the largest contract in the country’s history. At current prices, building two reactors at Dukovany will cost 407 billion crowns. The project will be undertaken by South Korean company KHNP, which won last year’s tender.

"Today, after weeks of intensive discussions and preparations between my team and the European Commission, we formally submitted an application for notification of state aid for two new units at the Dukovany nuclear power plant. We have already overcome hundreds of obstacles, and many more lie ahead. Obtaining the notification is crucial to the successful continuation of the entire project," Industry and Trade Minister Lukáš Vlček (STAN) said in a press release today.

He also recalled that on Monday in Brussels he had discussed the EC’s notification for the construction of the sixth unit at Dukovany with European Commission Executive Vice-President Teresa Ribera.

"We are at a stage where the project is under way, the EPC contract has been signed, all the transport infrastructure projects are under way, and exploratory drilling and archaeological work are being carried out. But one more thing needs to be brought to completion: notification of the state aid, which the Czech Republic currently has for the fifth unit, while we want to build two units," he told ČTK in Brussels on Monday.

In the spring, the government announced that construction of the nuclear units at Dukovany would be financed through a state loan to Elektrárna Dukovany II, the company in charge of the project. The loan is expected to correspond to roughly 200 billion crowns per reactor and cover all construction costs. Once the reactors are completed, the company will repay the loan to the state over 30 years.

However, preparations for the project are continuing even though the notification has not yet been approved. The state-controlled company Elektrárna Dukovany II (EDU II) will use a bridging loan to fund preparatory work and studies ahead of construction of the nuclear units at Dukovany. This will be a temporary solution until the EC makes its decision.

Geological surveys began in early August at the site in Dukovany, in the Třebíč area, and its surroundings, where two new nuclear units will be built. This is the first physical work on the project. The work, which is expected to be carried out by Czech companies, should cost hundreds of millions of crowns. Under the current schedule, the first unit is expected to enter operation in 2036.

The state owns 80 percent of EDU II, while ČEZ owns the remaining 20 percent. The government decided this spring to buy the majority stake for 3.6 billion crowns.