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Photo = Korea Hydro & Nuclear Power |
[Alpha Biz= Kim Jisun] Korea Hydro & Nuclear Power (KHNP) has established a dedicated risk management unit to strengthen oversight of large-scale overseas projects, following significant loss provisions tied to international operations.
The company announced on May 28 that it has carried out an organizational restructuring—its first since CEO Hwang Joo-ho took office in March—aimed at improving risk controls and operational efficiency.
KHNP recorded approximately KRW 1.43 trillion in construction loss provisions last year, reflecting anticipated cost overruns in overseas projects. Of this, KRW 1.21 trillion was linked to the El Dabaa nuclear power project in Egypt, where the company is participating as a subcontractor. The project has faced rising costs due to supply disruptions and price surges amid sanctions affecting Russian suppliers.
An additional KRW 220 billion provision was tied to the tritium removal facility (TRF) project in Romania, where delays exceeding one year have occurred due to complex regulatory approvals and design requirements.
Audit findings revealed that internal review bodies responsible for assessing overseas projects lacked sufficient external expertise and were operated in a largely formal manner.
In response, KHNP has launched a new “Project Risk Management Office” to independently evaluate risks related to economics, finance, legal matters, and project execution prior to investment decisions. The company will also introduce a risk management committee involving external experts to enhance oversight.
Additionally, KHNP has streamlined its headquarters and reassigned around 100 employees to field operations, while strengthening safety systems and advancing digital transformation initiatives, including integrating AI capabilities into its core operations.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
