SEOUL // South Korean firms will meet an ambitious timetable for building the UAE's first nuclear reactor, even if it leads to delays for their own nuclear power projects, officials say.
The reactor design planned for Abu Dhabi will be built by May 2017, four months faster than previous projects of the same type, through pre-manufacturing major components and devoting more manpower to the project, said Byun Jun-yeon, the executive vice president of Korea Electric Power Corporation (KEPCO), the prime contractor on the project.
"The UAE project is our top-of-top priority," he said. "We are going to mobilise all our best resources in terms of human resources, equipment and material into this project."
The awarding of the US$20 billion (Dh73.35bn) contract to South Korean firms last month to build the UAE's first reactors transformed KEPCO from a bit player in the global nuclear industry into a leading contender for other contracts around the world. But Mr Byun indicated yesterday that the company was now focused wholly on completing the Abu Dhabi project under the strict time and cost limits to prove the country's capabilities to the nuclear market.
The firm has eight reactors under construction in South Korea.
The Emirates Nuclear Energy Corporation (ENEC) said it chose KEPCO's bid over rival bids from a French consortium and a US-Japanese alliance, in large part because it offered the lowest price and had a record of building its plants on schedule, and running them more efficiently than any other operator.
The reactor in Abu Dhabi will be the fifth in an advanced series, called the APR-1400, which is not yet operating anywhere. Mr Byun said it would be built more quickly than a previous model that is operating at eight sites across his country and under construction at four more.
"The APR-1400 has much improved capacity and safety compared to the [older design], even though they have a four-month-shorter construction period," he said.
The firm's ability to deliver the reactors quickly and cheaply is largely a result of its close partnership with subsidiaries and partners, with which it has been building plants for 20 years, Mr Byun said.
KEPCO has historically led South Korea's nuclear programme, but depends on a number of partners to build infrastructure, supply key components and operate the plants.
After building so many projects with its associates, the company knew exactly how much to pay the subsidiaries and equipment suppliers to keep costs down, said Lim Hyun-seung, the general manager for KEPCO's overseas nuclear project team.
The structure of the KEPCO bid, in which the company was fully responsible for the subcontractors and equipment suppliers, was a key reason it won the contract, said Padraic Riley, the director of communications at ENEC.
"KEPCO is in charge of this programme, and that will help to make things smoother, on budget and on time," he said.
KEPCO's win has been recognised as a watershed moment for the firm's efforts to export its reactors, with a number of developing countries suggesting they might welcome a Korean bid to build their nuclear reactors. A nuclear adviser to the Korean government, Chung Kun-mo, told Bloomberg last week that Korean firms were exploring business opportunities in Turkey and Jordan as well as in China, India, Malaysia and Kenya.
Mr Byun would not comment on the recent reports, citing sensitive diplomatic relationships.
Whang Joo-ho, a professor of nuclear engineering at Kyung Hee University who has advised his government, predicted that the relatively low price of the project would not yield large profits for KEPCO but would open up additional business opportunities at a time when growth in domestic electricity consumption was slowing.
"It is our first experience to export a nuclear plant," he said. "Our industry will keep growing up."
@Email:cstanton@thenational.ae
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
WWE TLC results
Asuka won the SmackDown Women's title in a TLC triple threat with Becky Lynch and Charlotte Flair
Dean Ambrose won the Intercontinental title against Seth Rollins
Daniel Bryan retained the WWE World Heavyweight Championship against AJ Styles
Ronda Rousey retained the Raw Women's Championship against Nia Jax
Rey Mysterio beat Randy Orton in a chairs match
Finn Balor defeated Drew McIntyre
Natalya beat Ruby Riott in a tables match
Braun Strowman beat Baron Corbin in a TLC match
Sheamus and Cesaro retained the SmackDown Tag Titles against The Usos and New Day
R-Truth and Carmella won the Mixed Match Challenge by beating Jinder Mahal and Alicia Fox
UAE currency: the story behind the money in your pockets
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”