Kang Seong-san sought $2 billion to match Seoul's nuclear prestige
By Eleanor Voss ·
North Korea gambled on a $2 billion Soviet credit to match South Korean prestige, accepting IAEA inspections to secure a reactor that Soviet experts warned would take a decade to build.
Between February 4 and 12, a deputation from GOSPLAN, the Soviet National Planning Office, arrived in Pyongyang to negotiate the construction of a nuclear power plant. The details of these meetings were captured in a report from the Hungarian Embassy in North Korea to the Hungarian Foreign Ministry, provided as an English translation by the Cold War International History Project.
According to the record, Premier Kang Seong-san made it clear to the Soviet delegation that the plant was not merely a matter of energy production. He emphasized that the project was of "political importance." The motivations were twofold: the North sought to offset the fact that a nuclear plant was already operational in South Korea, and it aimed to "enhance the DPRK’s economic prestige in foreign eyes."
A Rivalry with the South
This obsession with prestige suggests a regime measuring its legitimacy through technological parity. While the public record indicates that North Korea has been active in developing nuclear technology since the 1950s, this specific effort was framed as a competitive response to Seoul. The project was not envisioned as a slow crawl toward energy independence, but as a visible symbol of socialist modernity.
To achieve this, the two sides reached a preliminary agreement on the terms of planning, construction, and operation. However, the financial arrangements remained a point of friction. The Soviet Union was expected to provide a credit of 2 billion dollars, but the interest rate was a matter of contention. The North Korean side pushed for a rate of 2 percent, while the Soviet side proposed 4 to 6 per cent. The report notes that the Korean minister of foreign trade had already discussed the issue in Moscow, with a final resolution expected during Premier Kang’s upcoming spring visit to the Soviet capital.
The Hamheung Site
Determining where to place the reactor required a process the Soviets estimated could take up to two years. Six possible sites were selected, and these were being "geologically and seismographically located by land and air." The most probable location identified in the report is the industrial area of Hamheung. Situated on the coast of the Sea of Japan, Hamheung was favored because it was already equipped with "proper infrastructure."
There was a significant disconnect regarding the timeline. The North Korean leadership expressed a desire to complete the construction within five years. The Soviet experts, more attuned to the actual requirements of nuclear engineering, estimated a timeframe of 10 to 12 years. This gap between political aspiration and technical reality is a recurring theme in the record.
The Cuba Precedent
Soviet planners did not intend to invent a new model for Pyongyang. The report mentions that the preparation of plans was facilitated by the fact that a nuclear power plant of "similar capacity was already built in Cuba." Under the proposed agreement, Soviet experts would build the reactor, the blocks, the safety zone, and the supply units. Following completion, these facilities would remain under Soviet guidance for five years.
The North Koreans were assigned the construction of the external and biological safety zones and other related supply units. Procurement was split by currency and origin: equipment from COMECON (the Council for Mutual Economic Assistance) would be procured by the Koreans with Soviet cooperation, while "convertible equipment" would be ordered and paid for by the Soviets on behalf of the Koreans.
IAEA and Uranium
One of the more striking entries in the report is the North Korean acceptance of international oversight. The document states that the Korean side accepted that the construction and future operation of the plant would follow the standards of the International Atomic Energy Agency (IAEA), and specifically that the organization would be able to "enforce its right to conduct inspections."
While the Soviet Union agreed to provide enriched uranium for an initial period, the report indicates that North Korean geological surveys for uranium ore were being "speeded up with Soviet cooperation," with initial results described as "encouraging."
This exchange took place within a wider web of intelligence and diplomacy. Related files in the National Security Archive and FRUS records from the era track US intelligence assessments of North Korean strategy and tactics, reflecting a period of intense scrutiny of the DPRK's technical ambitions. Within the Hungarian diplomatic circuit, the report notes that Comrade Ferenc Rátkai was informed of these developments by the first secretary of the Soviet embassy.
Whether the interest rate dispute was settled in Moscow, or if the optimistic five-year timeline was ever seriously entertained by the Soviets, the record does not say. It leaves the project in a state of preliminary agreement, pending the geological surveys of the Hamheung coast.