Japan signed an agreement Monday to finance the construction of two light-water nuclear reactors in North Korea, completing the funding of the project under an 1994 accord between the United States and North Korea on Pyongyang’s abandonment of its nuclear development program. The loan agreement was signed in Tokyo between the Japan Bank for International Cooperation and the Korean Peninsula Energy Development Organization. The signing, together with other arrangements between KEDO and South Korea, will enable primary construction of the reactors to begin as early as this month in Kumho, northeastern North Korea, a Foreign Ministry official said. Under the agreement, signed by JBIC Vice President Kyosuke Shinozawa and KEDO Executive Director Desaix Anderson, Japan is to provide up to 116.5 billion yen in loans to KEDO to finance the reactor project. On Dec. 15, KEDO signed another loan agreement with the Export-Import Bank of South Korea as well as a construction contract with Korea Electric Power Corp. of South Korea, the main contractor for the project. Although land development had already begun at the reactor site, full-scale construction of the reactors has not started due to the pending arrangements by the parties involved. Construction of the reactors is being financed mainly by South Korea and Japan. Of the estimated $4.6 billion cost, Seoul pledged to provide $3.22 billion, or 70 percent of the total, while Tokyo has committed $1 billion, or 116.5 billion yen. KEDO is an international energy consortium created in 1995 to provide two light-water reactors with a capacity of 1,000 mw each to North Korea in exchange for Pyongyang’s abandonment of its nuclear development program, as agreed in a 1994 U.S.-North Korean accord. Under the 1994 framework, Washington is to provide Pyongyang with 500,000 metric tons of heavy fuel oil annually via KEDO until the two light-water reactors start operations. Under the initial plan, the reactor project was expected to end in 2003, but it came to a standstill in August 1998, when North Korea test-fired a Taepodong-1 missile over Japan, leading Tokyo to freeze financial cooperation to KEDO. Japan lifted the sanctions two months later. KEDO consists of 12 members, including the U.S., Japan, South Korea, the European Union, Canada, Australia, New Zealand and some Latin American and East European countries.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.