KEPCO to Participate in IPP Project in Saudi Arabia

Becomes the preferred bidder to land a thermal power plant project

Korea Electric Power Corp. has been selected as the preferred bidder to win a project to build a heavy oil-fired thermal power plant in Rabigh, Saudi Arabia, which was placed by the Saudi state-run power company, SEC.
A consortium of KEPCO and ACWA Power International of Saudi Arabia beat out a global independent power producer (IPP) consortium of Suez of Belgium, IP of the United Kingdom and Oger of Saudi Arabia.
The project calls for the construction of a thermal power plant with a capacity of 1,204MW in Rabigh, 150 km north of Jedda, Saudi's second largest city on the Red Sea coast. The project, taking the form of "Build, Own and Operate," will allow the concessionaire to manage the operation of the projected plant for 20 years.
SEC will take a 20 percent stake in the planned project company, while KEPCO and ACWA will each take a 40 percent interest. KEPCO and ACWA will raise the massive funding necessary for the implementation of the project in a project financing deal with local Saudi banks and foreign banks.
KEPCO is to sign a formal contract on the project, which calls for the completion of the plant by April 2013 after holding negotiations with SEC.
KEPCO now operates power generation facilities with a combined capacity of 2,992MW in such countries as the Philippines, China and Lebanon.
The latest project in Saudi Arabia would be the biggest one in the Middle East. If KEPCO is awarded the project, the agreement would give KEPCO an opportunity to not only set up a bridgehead for its entry into Saudi Arabia, but also to enhance its standing as an IPP developer, KEPCO officials said. nw

KEPCO Nearing Korean-Type Nuclear Unit Deal with Jordan
Korea Electric Power Corp. (KEPCO) has come closer to landing a deal to export a Korean-type nuclear power unit to Jordan as the two sides have almost chosen a private contract method rather than turning to an international bid on a project to build the Middle Eastern country's first nuclear power plant, KEPCO Chairman and CEO Kim Sang-soo said. CEO Kim disclosed this during a meeting with reporters shortly after holding consultations with the Jordan Atomic Energy Commission (JAEC) and other Jordanian government agencies in Amman on March 10. "Some issues remain to be ironed out, but an agreement on the core of the project has been reached with the forthcoming discussion of the specifics," he said.
KEPCO inked a memorandum of understanding on closer cooperation in atomic power generation with the JAEC last December when Jordanian King Abdullah made an official visit to Korea. The MOU agreement calls for collaboration in projects to build nuclear power plants, a waterway linking the Red Sea and the Dead Sea and desalination facilities in Jordan.
Kim said Jordan planned to cooperate with France and Korea on projects to build its first and second nuclear power units, respectively, but changed its mind to turn the first nuclear power unit project over to Korea.
"Tangible achievements on the first nuclear unit project will be made in April or May, and chances are high that Korea could land the project as Jordanian King Abdullah and Prime Minister Dahabi are affirmative in introducing the Korean-type nuclear power unit," he said.
He said, "KEPCO plans to participate in an international bid to build nuclear units in the United Arab Emirates, and our talks on nuclear power projects in China and Turkey are at an initial stage, so chances are high that Korea's first export of nuclear power units will be realized in Jordan." The KEPCO chairman declined to talk about his company's proposal with the Jordanian side, but business sources said the Korean side insisted on shouldering a 20 percent share in the cost of the project worth more than $5 billion.
Jordan plans to raise the portion of nuclear power to 30 percent of its total power generation capability by 2040. According to the plan, Jordan will build its first and second nuclear power units in the Akaba area on its southern coast. Jordan, which has already signed MOUs with such nuclear powerhouses as France, the United States, Canada and Korea, is pushing preparatory procedures including the selection of nuclear power unit sites and feasibility studies.
In a related development, KEPCO and the ENKA Group of Turkey agreed to establish a $10-billion joint venture to bid for a contract to build Turkey's first nuclear power plants. The deal raised the possibility that KEPCO, now a 30-year veteran of the construction and operation of nuclear power plants, could make an inroad into the Turkish nuclear power plant market, KEPCO officials said. KEPCO said last May 16 that it signed the Joint Development Agreement (JDA) to win contracts to build nuclear power plants in Turkey. ENKA Group has the country's largest construction company and the biggest power-generating companies as affiliates. It has built nearly half of Turkey's thermal power plants now in operation.
KEPCO will shoulder $1.8 billion, accounting for 60 percent of the $3 billion paid-in capital of the joint venture, and ENKA will fund the remaining $1.2 billion. KEPCO and ENKA will finance $10 billion for their joint projects and $7 billion will be raised through investors from across the world. Societe Generale was selected as the financial advisor to raise the $7 billion.
If KEPCO is awarded the Turkish nuclear power plant contract, it will be the fifth company in the world to export nuclear power technology abroad, and KEPCO's efforts to explore nuclear power markets in the United States, Indonesia, Ukraine and the Philippines will gain momentum, KEPCO officials said.
KEPCO has six thermal as well as hydro & nuclear power companies as its affiliates. The six power companies, including Korea Hydro & Nuclear Power Co., were spun off from KEPCO during the nation's restructuring of the domestic power industry in 2001. KEPCO has accelerated its bid to explore foreign nuclear power and thermal power markets.
KEPCO is credited with producing electricity with an international competitive edge, which is behind the breathtaking economic strides Korea has achieved so far. The competitive edge is owed to KEPCO's efforts to innovate in a wide range of areas from the receipt of electricity charges to the supply of materials, devices and logistics. nw