"Prepay KRW 25 Trillion in Electricity Bills": KEPCO Makes Unprecedented Proposal to Samsung, SK Hynix

It has been confirmed that Korea Electric Power Corporation (KEPCO) has proposed to Samsung Electronics and SK Hynix that they pre-pay five years' worth of electricity bills—amounting to KRW 20 trillion and KRW 5 trillion, respectively—and is currently discussing detailed terms.

KEPCO's plan is to utilize this KRW 25 trillion in advance payments as funding for the construction of power grids for the semiconductor clusters in Yongin and the Honam region.

KEPCO recently proposed that Samsung Electronics and SK Hynix prepay electricity bills totaling KRW 20 trillion and KRW 5 trillion, respectively.

Last year's electricity bills came to KRW 4.1 trillion for Samsung Electronics and KRW 900 billion for SK Hynix. Based on these figures, the estimated electricity costs for the next five years starting next year were calculated.

Currently, there is a system that allows KEPCO customers to prepay electricity bills under the name of advance payments and receive interest on them.

To utilize this system as a large-scale fundraising tool, KEPCO is also reviewing plans to establish a separate special provision.

It is reported that KEPCO has proposed an interest rate higher than the yield on two-year Treasury bonds to the two companies for the prepaid fees.

Instead of cash, a method of paying out the interest by deducting it from electricity bills on a semi-annual basis is being discussed.

However, KEPCO stated that while it is true they proposed electricity bill prepayment to the two companies, specific details such as participation, interest rates, and the size of the prepayment have not yet been finalized.

Deteriorating financial capacity is cited as the background behind KEPCO's prepayment proposal.

As of the end of June, KEPCO's liabilities stood at KRW 210.7 trillion, with interest expenses alone running at around KRW 115 billion per day.

KEPCO believes that the electricity bill prepayment system will allow companies in urgent need of power grid expansion and KEPCO, which requires investment capital, to mutually complement each other's needs.

Reported by Jung Da-eun | Video by Kim Na-on | Graphics by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.