The Korean Peninsula Energy Development Organization (KEDO) is facing a possible collapse of its light-water reactor project due to financial straits.

According to the AP news agency, KEDO executive directors including Japan and South Korea have said they may not extend a grace period for loan repayment after the expiration of the current two-year period of deferment on December 1st.

The U.S.-led international consortium was estimated to owe the Export Import Bank of Korea and Japan Bank for International Cooperation 1.3 billion dollars and 450 million dollars respectively as of late 2004.

Under a 1994 accord, KEDO was charged with building two light-water reactors in North Korea in exchange for the North's nuclear disarmament.

Meanwhile, the organization recently held a meeting of executive directors to discuss pending issues and future directions following the possible halt of the construction.