KEPCO Strengthens Its
Presence Abroad

Inaugurates two power units in Henan Province to make its debut on the Chinese power generation market

Korea Electric Power Corp. (KEPCO) has inaugurated two circulating fluidized bed combustion combined cycle power units in Henan Province, China as its first project to enter the Chinese power generation market.
On hand at the dedication ceremony of the power units (50,000kWx2) were KEPCO Chairman-CEO Han Joon-ho and Chinese officials and power generation businesspeople.
The inaugurated combined cycle power units' supplies power to 1 million households in Henan Province as well as heat to a nearby paper-making factory.
The project cost 588 million yuan or about 70 billion won. KEPCO, which poured 152 million yuan or some 18 billion won, operates the power units for 21 years as a controlling shareholder. KEPCO is expected to chalk up in 4 billion won in annual revenues by operating the units and the Korean utility company is likely to recoup the capital investments in eight to nine years except the payment of interests.
Meanwhile, KEPCO.
has obtained a go-ahead from the Lebanese government on a $85.5 million project to operate and maintain two combined cycle power plants in Lebanon for the next five years.
KEPCO will operate and maintain power plants in Deir-Amar and Zahrani with a combined capacity of 8.7 million MW, which account for 47 percent of total power production in he Middle Eastern country.
In December 2005, KEPCO has become the preferred bidder in a bidding in which seven companies participated. The Lebanese government approved the deal with KEP, after assessing KEPCO's ability to make good on contract terms and holding price negotiations.
KEPCO plans to begin the operation of the Lebanese power plants following the signing of a formal contract.
A KEPCO official said KEPCO became the first Korean company to enter the Lebanese power generation market and secured a bridgehead for its presence in the Middle Eastern region, and KEPCO is expected to preoccupy the market prior to the planned civilization of the Lebanese power industry.
In a related development, KEPCO has begun to construct a 200-megawatt coal-fired power plant in the Philippine region of Cebu. The project is the third one KEPCO is undertaking in the Philippines following 650-megawatt Malaya and 1,200-megawatt Ilijan power plant projects.
A ground-breaking ceremony for the planned base load power plant in Cebu was held in Cebu on December 16, 2005.
The 200 megawatt (100 megawatt x two units) circulating fluidized bed combustion power plant is to be completed by the first half of 2009 at a cost of about $330 million. KEPCO has a 60 percent stake in KEPCO Cebu Corp. a joint venture with Singaporean-owned Salcon Power Corp. The proposed plant will sources coal from the Philippines or from Indonesia. Electricity from the plant will be sold to local distribution firms, large-scale clients and power trade exchange WESM.
On the same day, KEPCO inked a memorandum of understanding to acquire a 40 percent interest in Naga Power Plant, owned by Salcon Power Corp. The Korean power company will spend some 57 billion won to acquire its take and participate in the operation of the Naga Power Plant with a capacity of 200,000 kW.
Earlier, KEPCO struck an MOU with the Philippine to raise the capacity of the Ilijan Power Plant from the current 1.25 kW to 1.85 kW. The power plant is located on the Luzon Island, the largest one in the Philippines. The Ilijan project is under way under the BOT (Build, Operate, and Transfer) agreement for 23 years from March 1999, including three years of construction. It turns out to be a high value added undertaking by KEPCO with a 20-year-return of profits and a government guarantee.
It was in 1994 that KEPCO made its debut in the global power generation sector by undertaking the Malaya project aimed at raising its capacity from 430,000 kW to 650,000 kW. The thermal power plant, under operation by KEPCO, has shown a better performance to date following the project.
KEPCO officials said if and when KEPCO's investments go as planned, KEPCO's power generation capacity in the Philippines will increase from the current 1.85 million kW to 2.85 million kW in between 2008 and 2009. Its market share in the Southeast Asian country will likely rise from 12.3 percent to 18.9 percent, trailing Myrant which has a 20 percent share as the largest foreign-owned independent power producer.
KEPCO strives for becoming the biggest IPP in the Philippines with a more than 20 percent market share by participating in biddings for disposing of power plants owned by the state-run Philippine power company, NPC, they said. nw

KEPCO Chairman-CEO Han Joon-ho

KEPCO Chairman-CEO Han Joon-ho, other KEPCO and Chinese officials inaugurate two circulating fluidized bed combustion combined cycle power units in Henan Province.