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North Korea power venture endsFrom CNN's Liz Neisloss  A nuclear reactor at Kumho, North Korea. SPECIAL REPORTYOUR E-MAIL ALERTSUNITED NATIONS (CNN) -- A venture set up more than a decade ago to build two light water nuclear power plants in North Korea has been formally terminated by the four countries behind it. The United States, Japan, South Korea and the European Union announced it stopped the venture on Wednesday, citing a lack of cooperation. "This decision was taken based on the continued and extended failure of the Democratic People's Republic of Korea (DPRK) to perform the steps that were required," a statement from the consortium known as KEDO (Korean Energy Development Organization) said. The statement also said North Korea must compensate KEDO for "financial losses." South Korea was the main financial backer for the light water reactor construction project, with Japan putting up a lesser stake. A KEDO source said about $1.5 billion had been spent on the project. In 1994 the United States, under the Clinton administration, and North Korea entered an agreement in which Pyongyang would freeze and dismantle its nuclear weapons in exchange for the financing and construction of two light water nuclear reactors. The agreement also stipulated that the United States would provide North Korea with an alternative source of energy -- 500,000 metric tons of heavy fuel oil each year for heating and electricity production -- until the first of those reactors was completed. The broader KEDO consortium was formed the following year. The KEDO agreement began to unravel in November 2002 with reports that North Korea had resumed uranium enrichment. KEDO suspended shipments of heavy fuel oil, and North Korea expelled inspectors from the Yongbyon nuclear facility, which was supposed to be frozen under the KEDO agreement. Then in early 2003, North Korea announced it was withdrawing from the Nuclear Non-Proliferation Treaty and resuming operations at Yongbyon. Construction at the one KEDO site in Kumho, North Korea, has been effectively suspended since late 2003. 
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