Korea and US Agree on $200 Billion Strategic Investment Projects

The South Korean and US governments have agreed to push for three strategic investment projects under the Korea-US Strategic Investment Memorandum (MOU). The first project is a $22.3 billion gas combined cycle power plant in Texas, which will supply electricity directly to artificial intelligence data centers nearby. The site, natural gas, and water needed for the business will be provided by Lewis Energy Group, Texas' fifth-largest natural gas supplier.

The government has acknowledged that there is uncertainty surrounding the project due to the lack of a power purchase contract (PPA) with an off-taker to purchase power from the plant. However, Minister Kim Jung-kwan stated that the US government has promised to arrange the PPA and that the expected return on the Texas project is 13.9%. The mid-10% range is considered a return worth investing in by the private sector.

The second project is the $120 billion Korea-US nuclear power plant framework, which includes building eight large nuclear power plants (two APR1400s and six AP1000s) in the US using the Korea-U.S. strategic investment fund of 120 billion dollars. The two governments have agreed to make 'reasonable efforts' to ensure that the time difference between the first and second EPC contracts does not exceed six months.