Board members of the Korean Peninsula Energy Development Organisation (KEDO) agreed on cost-sharing for the light water reactor project. KEDO will supply and finance two light water reactors to North Korea, allowing increased work at the project site in Kumho. The Executive Board agreed a new budget estimate for the project of $4.6 billion. The original estimate of $5.2 billion, agreed in November 1997, was revised to reflect exchange rat changes.

South Korea will provide 70 per cent of the project’s cost. Japanwill contribute $1 billion; the EU will contribute $70 million over five years, and the US confirmed its commitment to fund the supply of heavy fuel oil to North Korea as appropriate.

However, progress on the reactors continues is slowed by North Korea’s refusal to allow inspection of a suspected underground nuclear site. This would jeopardise the 1994 agreement by which North Korea will be supplied with two LWRs and oil in return for freezing its nuclear programme.