Korea Electric Power Corp. unveiled plans to spend 73 trillion won ($55 billion) by 2038 upgrading the nation’s power grid, with the bulk aimed at feeding electricity-hungry semiconductor plants in the Yongin cluster. The state utility’s ambitious infrastructure push faces serious funding questions given its crushing debt load of more than 200 trillion won ($150 billion).
KEPCO announced on May 27 that the “11th Long-term Transmission and Substation Facility Plan” was approved at the 312th Electricity Committee meeting of the Ministry of Trade, Industry and Energy. The plan represents a 16.3 trillion won (28.8%) increase compared to the 10th plan, driven by material cost inflation and underground transmission requirements.
The expansion includes facilities to ensure a timely supply of over 10GW of power to the Yongin semiconductor industrial complex, targeted for completion in 2031. Samsung Electronics and SK Hynix are pouring hundreds of billions into the cluster, with SK Hynix alone committing 9.4 trillion won ($6.77 billion) for its first facility.
KEPCO’s financial position remains precarious despite recent improvements. The company’s debt-to-equity ratio improved from 496.7% at the end of last year to 479.7% in the first quarter, yet total debt reached 206.8 trillion won. The utility has struggled with massive losses in recent years due to government-controlled electricity pricing that failed to keep pace with surging fuel costs.
The company plans to fund the grid expansion through “management efficiency, cost reduction efforts, and appropriate electricity rate adjustments,” with borrowing as a backup option. However, KEPCO has already reached bond issuance limits and faces a maturity wall of significant proportions.
KEPCO estimated that it will incur approximately 1 trillion won for new transmission and substation investments in Samsung’s Pyeongtaek Campus and SK Hynix’s Yongin Semiconductor Cluster, representing just a fraction of the total infrastructure needs as Korea positions itself as a global chip manufacturing hub.
