KEPCO seeks $15 billion advance from Samsung to fund grid expansion
KEPCO proposes Samsung pay $15 billion in advance for power through 2031 to fund grid expansion for chip fabs and AI data centres.
South Korea's state-run power utility, Korea Electric Power Corp (KEPCO), has proposed that Samsung Electronics pay 20 trillion won (approximately $15 billion) in advance for electricity supply through to 2031. The proposal, reported by the Chosun Ilbo and confirmed by KEPCO, is aimed at financing the expansion of the national grid to support new semiconductor and artificial intelligence data centre projects.
According to the internal KEPCO document cited in the report, the utility has also proposed a 5 trillion won advance payment from SK Hynix. KEPCO acknowledged in a statement that it had suggested an advance payment scheme to major power users, including Samsung and SK Hynix, but clarified that participation, interest rates, payment amounts, and payment periods have not yet been finalised.
The utility intends to use the funds to build transmission and substation networks for chip fabrication plants. In return, companies would receive interest above the yield on two-year Korean government bonds, as per the report. KEPCO said the arrangement would help meet rising investment needs while providing companies with greater certainty over timely power supply for new factories.
Samsung did not have an immediate comment, and SK Hynix did not respond to a request for comment. The proposal comes as South Korea accelerates efforts to strengthen its semiconductor ecosystem, which requires significant electricity infrastructure to support energy-intensive manufacturing and data processing facilities.