South Korea selects Texas power plant project — Korea Herald
In South Korea, the government has selected a combined-cycle gas power plant in Encinal, Texas, as the first project for investment in the United States under a $350 billion package. The Ministry of Trade, Industry and Energy and the Ministry of Economy and Finance informed parliament of these plans, Korea Herald reports.
The power plant is to supply electricity to nearby data centers for artificial intelligence and semiconductor manufacturing facilities. If the decision is finally confirmed, it will become the first U.S. project to attract South Korean capital following last year's trade agreement between Seoul and Washington.
Under this agreement, the United States agreed to reduce tariffs on most South Korean goods to 15% in exchange for Seoul's investment package.
Expected returns
According to lawmakers briefed on the project, South Korea expects returns of up to $45 billion over the next 20 years from the $23.2 billion investment. Kim Sung-won, chairman of the parliamentary committee on trade, industry, energy, small and medium-sized enterprises, said the government had guaranteed the commercial viability of the Texas project.
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Oh Ki-hyung, a lawmaker from the Democratic Party of Korea, also said that the Finance Ministry had recognized the project as commercially viable. President Lee Jae-myung had previously emphasized that commercial viability was a key criterion in negotiations over the investment package and that the government would not approve investments that did not meet it.
Opposition position and other projects
The opposition People Power Party questioned whether the project's commercial viability had been fully proven and whether the country had appropriate legal mechanisms for a worst-case scenario. Lawmaker Bae Jun-young also raised questions about the finalization of contracts and the availability of documents that would protect the initial capital.
Among other possible projects, lawmakers named the acquisition by South Korean entities of a stake in the U.S. nuclear energy company Westinghouse and a liquefied natural gas project in Alaska. According to lawmaker Choi Soo-jin, the governments of South Korea and the United States are discussing the size of the stake in Westinghouse, and Seoul seeks to obtain between 5% and 10%. Industry Minister Kim Jung-kwan noted that Seoul has not yet confirmed a decision on implementing these two projects.
