Pohang AI Data Center and Yeonggwang BESS Confirmed as 9th and 10th Regional Revitalization Investment Fund Projects

Simultaneous Expansion of AI Computing and Power Grids
Full-Scale Government–Private Collaboration on Investment

The government has selected the Pohang Artificial Intelligence (AI) Data Center and the Yeonggwang Battery Energy Storage System (BESS) projects, amounting to a total investment of 780 billion won, as the 9th and 10th regional revitalization investment fund projects. By simultaneously expanding both AI data center and power infrastructure, the plan aims to strengthen the foundation for advanced local industries and broaden the investment model for regions by leveraging private capital.

According to the Ministry of Planning and Budget on August 6, the 'Pohang AI-Dedicated Data Center' and 'Yeonggwang Battery Energy Storage System (BESS)' projects have been selected as the 9th and 10th regional revitalization investment fund projects. The 9th project, the Pohang AI-Dedicated Data Center, will invest a total of 600 billion won to construct a GPU-based water-cooled AI data center with a power reception capacity of 40MW (IT load 32MW) at Gwangmyeong General Industrial Complex in Pohang, North Gyeongsang Province. Key administrative approvals and power supply have been completed, and construction is scheduled to start in the second half of this year with operations expected to begin in the first half of 2028. The construction process is anticipated to create approximately 4,300 jobs and generate an economic effect of 1.2 trillion won.

Aerial View of Hamyang AI Data Center

The 10th project, the Yeonggwang Battery Energy Storage System, involves building a BESS in Yeonggwang-gun, Gwangju Integrated Metropolitan City, with a total investment of 179.8 billion won, featuring a maximum discharge capacity of 80MW and a storage capacity of 480MWh. It can supply electricity for up to six hours and is designed to store surplus renewable energy for use during peak demand, thereby enhancing grid stability and the utilization of renewable energy. Construction started in the first half of this year, with completion scheduled for December and operations targeted to begin early next year.

So far, the government has established a parent fund worth a total of 800 billion won, selecting 10 projects with a cumulative project cost of 4.4 trillion won. Previously, as the first regional revitalization investment fund project, the government initiated the development of a mixed-use tourism complex on the former railway site at Danyang Station in North Chungcheong Province and construction of new residential facilities in the National Industrial Complex in Gumi, North Gyeongsang Province, to attract workforce inflow.

The regional revitalization investment fund is a policy finance model in which local governments and the private sector identify business opportunities tailored to local needs, and a parent fund—financed in part by the government—acts as a catalyst to secure private capital for project development. The government, the Local Disappearance Response Fund, and Korea Development Bank contribute to the parent fund, while local governments and the private sector form sub-funds that then invest in project-specific special purpose companies (SPCs).

The parent fund invests up to 50% in sub-funds, and the sub-funds cover about 20% of the total project cost, with the remainder financed through private sector loans and other sources. This structure achieves a leverage effect of at least 10 times the amount invested by the parent fund. The government stated, "We plan to continue supporting regional revitalization projects through risk-sharing by the parent fund, shortened or waived fiscal investment reviews, special guarantees by Korea Housing & Urban Guarantee Corporation (HUG), and the provision of education and consulting services."

This content was produced with the assistance of AI translation services.