South Korea and the Czech Republic agreed to deepen economic cooperation, focusing on constructing new nuclear power plants in the Czech Republic. The two countries agreed on Friday to strengthen financial collaboration to ensure the successful completion of the $17.4 billion project.

The two countries’ finance ministers also signed a memorandum of understanding (MOU) to expand support for South Korean businesses in the Czech Republic. Additionally, they pledged to reinforce bilateral ties by establishing regular economic discussions to address macroeconomic and financial issues.

WHY IT MATTERS

The MOU between South Korea and the Czech Republic signals Seoul’s intent to broaden its economic ties with Prague, extending beyond the nuclear plant project to include other sectors like infrastructure and renewable energy. This agreement positions South Korean firms for expanded opportunities in Europe, which continues to seek alternatives to Russian energy sources.

The agreement also reveals that South Korea’s construction sector, under pressure from high domestic interest rates and rising energy costs, is increasingly looking abroad to maintain growth.

President Yoon Suk-yeol’s direct involvement in securing this deal highlights his administration’s aggressive foreign policy strategy, even if it risks straining Seoul’s relations with Washington. U.S. energy company Westinghouse Electric’s ongoing legal challenge over Korea Hydro and Nuclear Power’s reactor technology may require the two allies to engage in diplomatic negotiations and compromise. Prague’s final decision may make or break South Korea’s nuclear power export ambitions.