KEPCO to Step on the Gas
to Expand Overseas Presence

Aims at raising the portion of revenues from the overseas front to 8.6 percent by 2015

Korea Electric Power Corp. (KEPCO), which offers world-class quality electricity services, looks to further its ambitions to strengthen its presence on the overseas front.
KEPCO is credited with producing electricity with an international competitive edge, which has contributed partly to the breath-taking economic strides Korea has achieved so far. The competitive edge is owed to KEPCO's efforts to innovate in a wide range of areas ranging from the receipt of electricity charges to the supply of materials and devices and logistics.
Take a look into KEPCO's competitiveness. As of the end of 2006, KEPCO saw the power -cut time standing at 18.8 minutes per household, which compares favorably with advanced countries: 11 minutes for Japan, 138 minutes for the United States, 30 minutes for Taiwan, 68 minutes for the UK and 57 minutes for France. KEPCO has been recognized for keeping the regular voltage rate at 99.9 percent, the world's highest level. Even Taiwan, one of the global electricity powerhouses, registered a rate of only 95.9 percent in 1999.
KEPCO's electricity loss rate is measured at 4.02 percent, lower than the 5.10 percent rate in Japan. The company goes the extra mile in lowering the electricity loss rate by taking such steps as raising power transfer and distribution voltages and introducing more efficient equipment and devices.
However, KEPCO Chairman-CEO Lee Won-gul declares, "The domestic electricity market will reaches a saturation stage in 2010 or after, so KEPCO is setting its sights on aggressively exploring the foreign market by securing the world's top quality electricity and services."KEPCO Chairman Lee himself strives to prepare the company for changes in the future rather than resting on its laurels. He said KEPCO must not spare efforts to go global and raise its competitive edge before private electricity providers take up a 10 percent market share. It is through this commitment as a public corporation that KEPCO has topped a customer satisfaction survey for the eighth straight year.
He said that by winning the Customer Service Satisfaction Award, KEPCO has been recognized for making strenuous efforts to provide the best quality electricity and best services. Chairman Lee said his company will continue to strengthen new businesses by making the most of IT technology and streamline its institutional systems.
In particular, Lee is putting more energy into market diversification and global management. "KEPCO is striving to create new breadwinners from foreign markets with the goal of raising the portion of its overseas the revenues from the overseas front to 8.6 percent of its total revenues, or an approximately 3.8 trillion won by 2015."In reality, the domestic electricity market is likely to see the the growth of electricity demand slowing to a range of 1 percent. Competition in the electricity supply market will be getting fiercer as private electricity providers are projected to take up a 10 percent market share in 2015.
Lee reaffirmed his company's plan to find a niche in the overseas power business during an IR session held at the New York Stock Exchange on Sept. 6. In his speech, Chairman Lee said, "Overseas projects, now focusing on the power generation business, will be diversified to include power transfer and distribution, the telecommunications sector and businesses linked to the development of natural resources, while its operations, centering around Southeast Asian countries, will be expanded to such regions as the Middle East and Africa as part of efforts to minimize business risks and improve profitability."The IR session was part of the regular overseas road shows and international IR conferences used to publicize KEPCO's management strategies designed to enhance the shareholder value. Foreign investors own a 30 percent stake in KEPCO, which was listed on the New York Stock Exchange. Currently, 12.5 percent of all listed KEPCO shares, or 160.31 million ADRs (American Depository Receipts) are listed on the exchange. The IR conference was composed of a presentation session, a Q&A session and a closing bell ceremony.
BRISK OVERSEAS PROJECTS. In the latest development on Sept. 10, KEPCO inked an MOU with Ukraine's ENERGOATOM on promoting cooperation in the designing, launching, operation and technical servicing of nuclear power plants (NPPs). A six-member Ukrainian delegation, including Rybchuck, the director general in charge of new business at ENERGOATOM, visited such Korean NPP-related companies as KHNP, KINS, Korea Nuclear Fuel Co. and Doosan Heavy Industries during the period between Sept. 9 and Sept. 15.
KEPCO's signing of an MOU with ENERGOATOM is designed to materialize the collaboration between the two companies following an MOU signed between the Korean and Ukrainian governments in June 2007 when a Korean delegation visited Ukraine.
Earlier, KEPCO teamed up with GE Energy to make a joint entry into overseas markets. KEPCO Chairman-CEO Lee and his counterpart GE Energy Vice President of Global Sales James Suciu inked the agreement at the Fairmont Hotel in San Francisco on Aug. 7.
Under the agreement, KEPCO and GE Energy agreed to strengthen collaboration between the two companies on the implementation of new overseas projects as well as ongoing ones. Within the next two months, the two decided to hammer out the details of the joint projects they plan to carry out.
In his meeting with GE President Suciu, KEPCO CEO Lee touched on his company's willingness to enter the American power industry, one of the world's most advanced markets. Lee proposed to GE Energy their joint push for a business model of combining GE's capabilities to supply power generation equipment and materials and KEPCO's capabilities in the construction, operation and maintenance of power plants.
The presidents of KEPCO and GE Energy discussed ways for KEPCO's way to participate in M&As as well as the construction, operation and maintenance of power plants fitted with GE-supplied-supplied equipment and M&As.
They also exchanged views on KEPCO's plan to acquire gas turbine and combined-cycle power plants that have been built with GE-supplied equipment, but suffer operational difficulties.
Cashing in on the close cooperative ties it is building up with GE, KEPCO plans to accelerate its bid to strengthen its presence in overseas markets with a focus shifting from the existing markets - Asia and Africa - to European and American markets, according to KEPCO officials.
KEPCO has landed a $25 million (23 billion won) project to upgrade the two boiler units at the Egbin thermal power plant in Nigeria and ensure its normal operation.
KEPCO was awarded with the project to upgrade two boiler units by the Nigerian government, who recognized KEPCO's excellent technological prowess, outbidding such rivals as Marubeni of Japan and NPC of India. KEPCO's winning of the contract is significant in that the Korean power company has established a bridgehead for entering the African power market, KEPCO officials said.
The officials said KEPCO wants to make a joint entry into the Nigerian market with other Korean power concerns by making the most of the latest deal. KEPCO is in final negotiations with the Nigerian side on other projects including the operation and repair of the power plant, they added.
The Egbin power plant with a combined capacity of 1,320MW, located about 60 km east of Lagos, the economic capital of Nigeria, accounts for about 30 percent of Nigeria's total power generation.
A recent boiler explosion has suspended operation of two power units accounting for a capacity of 440MW - about a third of its total capacity - has exacerbated the chronic power shortage Nigeria has been suffering.
The reality is that most of power units in Nigeria are decrepit, so the power plants badly need to be upgraded with a power supply of 4,429MW or about 63 percent of the African nation's power capacity of 7,056MW. The nation has an insufficient power infrastructure with a power supply rate of less than 50 percent. Most of large buildings and houses for middle- or higher-level income households find themselves suffering from excessive noise and exorbitant electricity charges since they have to depend on their own independent power generation equipment.
KEPCO has designated Nigeria, which ranks 10th in global crude oil production, as a strategic center for entering the African market. The Korean electricity company expects Nigeria's electricity market to be one of KEPCO's growth engines by combining KEPCO's technological prowess and Nigeria's resources in keeping with a strategy of linking electrical power generation and energy resources.
In a related development, KEPCO plans to open a representative office in South Africa as part of the efforts to strengthen its presence in the African market, sources said.
KEPCO plans to dispatch two resident employees - one from KEPCO and the other from Korea Hydro & Nuclear Power Co. - to South Africa, they said. This will be the first time for KEPCO to send its resident employees to Africa. nw

(from left photo) Representatives from KEPCO and Ukraine's ENERGOATOM ink an MOU on collaboration between the two companies; KEPCO Chairman-CEO Lee Won-gul attends a closing bell ceremony of the New York Stock Exchange on Sept. 24; and KEPCO CEO Lee.