KEPCO proposes 25 trillion won electricity prepayment from Samsung and SK hynix

Korea Electric Power Corporation (KEPCO) has proposed that Samsung Electronics and SK hynix provide a combined 25 trillion won (approximately $18.1 billion) in electricity prepayments covering the period from 2027 to 2031.

Under the proposal, Samsung would pay 20 trillion won and SK hynix would pay 5 trillion won. The payments would be distributed over 12 months, with KEPCO offering interest rates slightly higher than 2-year government bonds on the remaining balances. The funds are intended to finance the construction of power grids for new semiconductor clusters in Yongin and Honam, ensuring that new manufacturing facilities have reliable power upon completion.

KEPCO is seeking these funds to address its massive debt, which has reached 210.7 trillion won, resulting in daily interest payments of approximately 11.5 billion won. Additionally, the utility faces upcoming restrictions on its debt issuance capacity, which is expected to decrease significantly after 2027. For the semiconductor companies, the arrangement serves as a guarantee of power supply for their new plants while providing a competitive interest return on the prepaid capital.