Retracting from Overseas
The Korea Electric Power Corporation (KEPCO) will sell or transfer its overseas resource development projects to other energy corporations in the public sector. The company has invested 1.6 trillion won (US$1.44 billion) in the projects over the last five years.
According to the Ministry of Strategy and Finance’s plan, the five bituminous coal mining projects and five uranium mining projects of KEPCO are scheduled to be sold or transferred to the Korea Hydro & Nuclear Power Corporation by 2016. In addition, its oil and gas exploration projects are to be handed over to the Korea National Oil Corporation with the Korea Gas Corporation in charge of imports and distribution in Korea. The Korea Resources Corporation will take its mineral resources development projects.
Moreover, the overseas power generation projects of KEPCO and five of its subsidiaries, on which more than 3 trillion won (US$2.7 billion) has been spent, are going to be trimmed down. The 21 solar power generation projects underway in Morocco, Chile and the like will be cut in half, while the subsidiaries will dispose of six of their investment projects, including wind power generation in the Philippines. Some of their shares in the four thermal power generation projects in Chile and so on will be put up for sale, too.
At the same time, 63 employees in charge of resource development and 62 responsible for power generation projects are expected to be subject to restructuring by 2017. “Nothing has been fixed yet concerning the matter, and we are currently exchanging opinions with the Ministry of Trade, Industry and Energy,” the ministry explained.
According to data from the parliamentary inspection of KEPCO in October this year, 12 out of the 25 subsidiaries of KEPCO were in the red last year. They recorded a current net loss of 56.3 billion won (US$50.6 million) combined, and KEPCO’s loss is estimated to be over 34.8 billion won (US$31.3 million) given its share ratios.
The seven engaged in overseas resources development posted a net loss of 40.1 billion won (US$36.0 million) during the same period. In particular, the amount reached 27.1 billion won (US$24.3 million) in those projects in Canada, Australia, and Indonesia run solely by KEPCO.