SK E&C signs power plant deal

SK Engineering & Construction and Seohee Construction inked a deal with Goseong Green Power on Friday to receive 3.7 trillion won ($3.2 billion) from construction of a thermal power plant in Goseong, South Gyeongsang.

The factory is set to be the biggest privately-run power plant in the nation.

The deal was an EPC (engineering, procurement and construction) agreement, which means the builder will take care of the entire construction process. SK E&C will make 90 percent from the project, while Seohee will take the rest.

The project involves construction of two 1,040-megawatt power plants, making up roughly 2 percent of all electricity generated in the country.

The power plants will operate at temperatures and pressures above the critical point of water, where the liquid and gas forms of water coexist in equilibrium. The company says this will raise power generation efficiency by about 15 percent.

“The efficiency greatly reduces the usage of coal,” an SK E&C spokesperson said. “We are also building them into eco-friendly thermal power plants by cutting greenhouse gas emissions.”

A total of 5.2 trillion won will be injected into the project, including the construction cost. Project financing will largely come from KB Kookmin Bank and Shinhan Bank, which clinched a deal to finance 4.34 trillion won for the project in December.

SK E&C, which also participated in the project as a strategic investor along with SK Gas and the Korea South-East Power Corporation, will earn operating income from the plant through 2051 after construction is slated to finish in 2021.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]