KEPCO Wins $800 Mln Diesel Power Plant Project in Jordan

President Kim is eager to expand overseas business presence

Korea Electric Power Corp. (KEPCO) said on Jan. 31 it landed an $800 million project to build a 600MW diesel power plant in Jordan, the first overseas contract since President Kim Joong-kyum took the helm at the corporation.
KEPCO teamed up with Mitsubishi Corporation of Japan and Warsila of Finland to win the IPP (independent power plant)-3 order placed by Jordan's National Electric Power Co. KEPCO holds a 60 percent stake in the consortium. Lotte E&C will be in charge of the construction of the planned internal combustion engine plant, while KEPCO KPS will be charged with operation and maintenance.
KEPCO officials said 75 percent of the $800 million will be raised through a project financing deal involving Korea Exim Bank, Nippon Export Insurance, and others, while the remaining 25 percent will be financed by consortium partners according to their stakes.
It is noteworthy that the 600MW-class IPP-3 internal combustion engine plant will be the largest one in the world.
KEPCO will complete the planning and capital financing for the project by August this year before it embarks on construction of the plant. Commercial operation of the plant is scheduled to start from March 2014.
Under the contract, KEPCO will operate the plant for 25 years, during which the company expects to raise $10.2 billion in aggregate sales.
The contract finally came through after many complications.
Six groups were accepted as successful applicants of the pre-qualification stage of bidding that took place on July 15. Three consortia ― the KEPCO-Mitsubishi Group, the Saudi Orger-Korea East-West Power (EWP) team, and a team led by Acwa Power of Saudi Arabia ― participated in the final bidding.
EWP withdrew from the final bidding, judging that competition with its mother company, KEPCO is against national interests.
Initially, the KEPCO-led consortium's victory was thought to be in the bag, but the unsuccessful bidder, Saudi Orger, disputed technology evaluations, forcing a delay in the awarding of the contract.
KEPCO's winning of the Jordan IPP-3 project is significant for President Kim, who strives to expand the company's business environs abroad.
Kim said his company aims at raising the portion of revenues from overseas business to up to 50 percent in the future. At a ceremony to launch the 2012 business year at the KEPCO headquarters on Jan. 2, he said,his company aims to enhance the portion of revenues from overseas business from the current 3 percent level to 50 percent in the future.
Kim warned that KEPCO will face a new environment while exploring overseas markets, and if the company rests on its laurels, it could collapse, as the Mongolian regime did the moment Mongolians got off their horses. He said, companies should face up to the reality in which we will die unless we break the mold.?
He stressed that the company should be reborn as a "Young KEPCO. To this end, Kim urged his staff to brace for the future quickly with fast execution power, have a mindset of dedication, and pursue endless changes and challenges.

KEPCO's URANIUM EXPLORATION
KEPCO announced on Feb. 2 it signed a contract to acquire a 14 percent share in Canada-based uranium developer, Strathmore (STM), with an investment of $8 million. The deal includes an option to buy a 40 percent share in STM's Gas Hills uranium mine in Wyoming, the United States.
KEPCO said the deal will allow the Korean utility giant to secure an annual supply of 545 tons of uranium, which is equivalent to some 12 percent of Korea's total uranium consumption, for 20 years from 2016 when the Gas Hills uranium mine begins production.
KEPCO will initially invest $8 million in acquiring a 14 percent stake in the Canadian uranium developer, to be wholly used for conducting a feasibility study for the exploration and development of the mine. The Gas Hills mine, with probable reserves of 27,000 tons, is to be developed after the next four years of prospecting. KEPCO said it plans to invest an additional $32 million to raise its stake in the mine to up to 40 percent, depending on the outcome of the feasibility study.
KEPCO has acquired stakes in overseas uranium mines with the goal of increasing its own uranium development rate to up to 60 percent by 2020. nw

KEPCO President Kim Joong-kyum holds a contract to acquire a 14 percent stake in Strathmore Minerals Corp. with Strathmore CEO David Miller in Seoul on Feb. 1.