April 20, 2024

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[THE INVESTOR] SK Engineering and Construction announced on Feb. 3 that it inked a 3.7 trillion won ($3.23 billion) deal to build South Korea’s largest private power plant in Goseong, South Gyeongsang Province.

The company will build two generator units at the thermal power plant, which will have a capacity of 1,040 megawatts. The company said it would apply top notch technology to build an efficient power plant. 

A drawing of the planned Goseong Hai Thermal Power Plant. SK E&C

It will adopt a technology called “ultra super critical,” which can increase efficiency by 15 percent by running at a higher temperature using less coal. The new plant, to be named Goseong Hai Thermal Power Plant, will also emit less pollutants, such as sulfur oxides and nitrogen, than other coal-fired power plants.

Once completed in 2021, the Goseong plant is expected to help ease the problem of power distribution in the nation as it would account for as much as 2 percent of the country’s total power generation, the company said.

SK E&C held a signing ceremony on Feb. 3 at Walker Hill Hotel in Seoul with Goseong Green Power, the power plant operator.

The project itself is the largest in the country both as an independent power producer with total construction expenses set at 5.2 trillion won. The amount of project finance is also the largest-ever, at 4.3 trillion won. Previously, the largest project finance for a construction project was for Incheon International Airport at 3.4 trillion won. The project financing for the Goseong Hai Power Plant was led by KB Kookmin Bank and Shinhan Bank. 

The Goseong deal is expected to boost the company’s portfolio of high-value development-focused projects, the company said. “We will continue to make successful cases of development project at home and abroad,” Cho Ki-haeng, vice president of the company, said on Feb. 2.

The company has been moving to shift its focus from engineering, procurement and construction in the industry which create lower profits to higher-value development projects. For a development project, a construction company can be involved in planning, building, operating and maintaining of a project, creating higher profits than simply being an EPC contractor.

The company successfully completed the Eurasia Tunnel project in December in Turkey and is also developing a thermal power plant project in Laos. Earlier this month, the company was selected as a preferred bidder for a 3.5 trillion won worth Canakkale Strait bridge project in Turkey.  

By Park Ga-young/The Korea Herald (gypark@heraldcorp.com)