SEOUL, May 17 (Korea Bizwire) — The revival of U.S. sanctions on Iran for its nuclear program is feared to cast a cloud over projects pursued by the state-run Korea Electric Power Corp. (KEPCO) in the Middle Eastern country, the utility firm said Thursday.
Defying opposition from its European allies, U.S. President Donald Trump abandoned a landmark 2015 nuclear deal with Iran last week, saying Washington will re-impose the stringent sanctions on Tehran.
According to a regulatory filing, KEPCO presented the U.S. Securities and Exchange Commission with an annual report that touches on the possible fallout from the resumption of America’s economic sanctions against Iran.
“Foreign companies are not directly subject to the sanctions, but they may violate related laws when using U.S. financial institutions to handle transactions with Iran,” KEPCO said. “Currently, KEPCO operates a branch in Iran. KEPCO and some subsidiaries are carrying out business projects.”
KEPCO is obliged to announce regulatory disclosures since the power company was listed on the New York Stock Exchange in 1994.
South Korea’s state power company has been conducting a series of projects in Iran after signing 10 partnership deals in 2016 in a bid to tap into Iran’s energy market.
In partnership with Iran’s state power company Tavanir, KEPCO is currently carrying out a pilot advanced metering infrastructure project in the Middle Eastern country.
KEPCO and its subsidiary Korea Western Power Co. are pushing to build two combined cycle power plants with capacities of 500 megawatts and 550 megawatts in Iran.
KEPCO said it is also carrying out a feasibility study for the introduction of a smart grid system into Iran.
The company said it has yet to register sales or profits from its Iranian business.
“KEPCO currently sticks to laws and rules related to the sanctions on Iran, but a difference in their interpretation could put us at a disadvantage,” the power firm said.
In the first quarter of this year, KEPCO posted an operating loss of 127.6 billion won (US$118 million) due to increased fuel costs and a drop in the use of nuclear power generation, marking the second consecutive quarter of loss.