KEY POINTS
- KEPCO has proposed Samsung prepay 20 trillion won ($15 billion) for power through 2031, and SK Hynix 5 trillion won, to fund grid expansion, the Chosun Ilbo says.
- The utility confirmed it suggested an advance-payment scheme but said participation, interest rates, amounts and periods are not finalised; Samsung and SK Hynix declined to comment.
- KEPCO would spend the funds on transmission and substations for chip fabs, paying interest above the two-year government bond yield.
South Korea’s state utility has proposed that Samsung Electronics pay 20 trillion won, about 15 billion dollars, in advance for power through 2031 to help fund a major grid expansion, the Chosun Ilbo reported.
Korea Electric Power Corporation, known as KEPCO, floated the prepayment to its largest industrial customers as demand from chipmaking and AI surges. Moreover, the paper said KEPCO also asked SK Hynix to prepay 5 trillion won, citing an internal company document.
Utility seeks upfront funding
According to KEPCO, it suggested the advance-payment scheme to major power users including Samsung and SK Hynix, but has not finalised the terms. Specifically, the utility said participation, interest rates, payment amounts and payment periods all remain open. Furthermore, both Samsung and SK Hynix declined to comment on the report.
KEPCO framed the plan as a response to soaring investment needs. Consequently, it said the arrangement would help meet rising demand from semiconductor and AI data centre projects, while giving companies more certainty over timely power supply for new factories. Additionally, the utility said it would channel the funds into transmission lines and substations serving chip fabs.
Balancing costs and reliability
However, the structure would not be a simple loan. According to the Chosun report, KEPCO would pay the companies interest set above the yield on two-year Korean government bonds, effectively compensating them for fronting the cash. Therefore, the manufacturers would gain a return alongside firmer guarantees that power reaches their plants on schedule.
The proposal reflects a wider strain on South Korea’s grid. Specifically, the country’s chip giants are pouring money into ever-larger fabrication complexes and data centres that draw enormous amounts of electricity, outpacing existing transmission capacity. Nevertheless, KEPCO, long burdened by heavy debt, has limited room to finance the build-out alone.
Still, much remains unsettled. Since KEPCO has not fixed participation, pricing or timing, the plan could change substantially before any company commits. Ultimately, the report signals how far South Korea may go to align private capital with public infrastructure, tying the fortunes of its biggest exporters to the reliability of the grid that powers them.
