KEPCO Steps Up
Presence in China

Establishes a joint venture with Shanxi Int'l Electricity Group and Deutsche Bank

Korea Electric Power Corp. (KEPCO) has inaugurated a joint venture with Shanxi International Electricity Group (SIEG) and Deutsche Bank to acquire power companies, construct power plants and tap into the coal mining industry in Shanxi Province, China.
KEPCO Chairman and CEO Lee Won-gul, Zhang Baoshun, party chief of Shanxi Province, and others participated in a ceremony to open the joint venture, called the Gemeng International Energy Group (GIEG) in Taiyuan, Shanxi Province on Dec. 6.
It was on April 5, 2007 that KEPCO, SIEG and Deutsche Bank obtained the nod on the establishment of the joint venture from China's central government. They completed the process of transferring assets in December 2007.
SIEG and KEPCO maintained shares of 47 percent and 34 percent in the 10 billion yuan ($1.34 billion) of capital, respectively, while the remaining 19 percent went to Deutsche Bank. GIEG will implement power generation and resources development projects in Shanxi Province, China's largest coal production center with one-third of the country's total coal reserves. KEPCO with its high technology, SIEG, Shanxi's largest power company, wholly owned by the provincial government, and world-renowned Deutsche Bank will join forces in implementing the projects for the next 50 years.
In line with part of the Shanxi provincial government's privatization and regional economic development policies, the joint venture is expected to receive more business opportunities as China's electricity demand is forecast to more than double from the current level by 2020. The joint venture will likely have synergistic effects by linking power generation and natural resources development projects.
GIEG will take over 15 power plants under operation or under construction, construct nine more power plants and develop nine coal mines. When the projects are completed, the joint venture will have a power generation capacity of 9.33 million kW, of which 3.17 million kW will go to KEPCO according to the production-sharing agreement and have a potential to produce about 60 million tons of coal per annum. The combined possible reserves and discoverable reserves are estimated at 7.8 billion tons and 2.3 billion tons, respectively.
KEPCO is credited with producing electricity with an international competitive edge, which is behind the breath-taking economic strides Korea has achieved so far. This edge is owed to KEPCO's efforts to innovate in areas ranging from the receipt of electricity payments to the supply of materials, devices and logistics.
KEPCO's innovations have shown in obvious and immediate ways.
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. The figure is compared to 11 minutes for Japan, 138 minutes for the United States, 30 minutes for Taiwan, 68 minutes for the United Kingdom 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 95.9 percent in 1999.
KEPCO's electricity loss rate is measured at 4.02 percent, lower than the 5.10 percent in Japan. The company goes the extra mile in lowering the electricity loss rate by taking steps to raise the power transfer and distribution voltages and introducing more efficient equipment and devices.
KEPCO is setting its sights on aggressively exploring foreign markets by providing the world's top quality electricity and services.
KEPCO CEO Lee earlier said, "KEPCO strives to create new breadwinners from foreign markets with the goal of increasing the portion of revenues from the overseas front to 8.6 percent of its total revenues or approximately 3.8 trillion won by 2015."
BRISK OVERSEAS PROJECTS KEPCO on Sept. 10, inked an MOU with Ukraine's ENERGOATOM on promoting cooperation in designing, launching, operating and the technical servicing of nuclear power plants (NPPs). A six-member Ukrainian delegation, including Rybchuck, 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 between Sept. 9 and 15.
KEPCO's MOU with ENERGOATOM is designed to materialize the collaboration between the two companies following an MOU inked 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's Lee and his counterpart GE Energy President James Suciu signed 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 determine the details of the joint projects they plan to carry out. nw

KEPCO Chairman and CEO Lee Won-gul and Zhang Baoshun, party chief of Shanxi Province, China, participate in a ceremony to open a joint venture specializing in acquiring and construction power plants as well as tapping the coal mining industry in Shanxi on Dec. 6.