[On-Site] Minister Kim Jungkwan: "I Came to the U.S. to Finalize Investment Negotiations"

"Negotiations Continue Until the Final Agreement Is Signed"

Kim Jungkwan, Minister of Trade, Industry and Energy, stated on the 10th (local time), "I have come to the United States to finalize the ongoing investment negotiations with the U.S."

At Newark Liberty International Airport in New Jersey, Minister Kim met with reporters including The Asia Business Daily. When asked whether this visit marked the final stage of negotiations, he replied, "I consider the negotiations ongoing until the final signature is completed."

Kim Jungkwan, Minister of Trade, Industry and Energy, is arriving in New York, USA on the 10th (local time). New York, USA – Photo by Yoonju Hwang

The Wall Street Journal (WSJ) reported on the same day, citing sources familiar with the matter, that South Korea and the United States are preparing to announce a large-scale energy investment package exceeding $100 billion. The planned investments reportedly include the construction of up to eight nuclear reactors in the U.S. and a natural gas power plant project in Texas.

According to WSJ, the two countries are finalizing two agreements, aiming to make an announcement as early as next week. However, as negotiations are still ongoing, the details of the investments and the timing of the announcement are subject to change.

The first major initiative under discussion is a nuclear power project designed to supply electricity to support the expansion of artificial intelligence (AI) data centers in the United States. It is understood that the initial nuclear reactors will use designs from Westinghouse Electric Company, while subsequent projects are being considered for the adoption of Korea’s reactor designs.

Another candidate for investment is a natural gas power plant project in Texas estimated at around $20 billion, which is also intended to supply electricity to nearby AI data centers.

WSJ also reported that if the negotiations proceed as planned, South Korea is preparing to allocate more than $2 billion in initial seed capital by the end of this month. The annual investment cap for South Korea has been set at $20 billion under the bilateral agreement, and the entirety of the investment is expected to be deployed over multiple years.

In response to reports that more than $2 billion in initial funding would be released by the end of the month, Minister Kim said, "I cannot confirm any specific details at this time," and added, "Please continue to monitor the situation."

Regarding speculation that the first U.S. investment project would likely be the $22.3 billion Encinal Gas Combined Cycle Power Plant in Texas, he said, "I don't think it's appropriate to speak about the negotiation details at this stage," adding, "I will comment once the final results are available."

In the final stage of the negotiations, a key issue is reportedly the structure for profit and loss settlement in these investment projects. The original South Korea-U.S. memorandum of understanding (MOU) specified an 'umbrella-type' special purpose vehicle (SPV) structure aimed at spreading risk by allowing profits from other projects to cover losses incurred in specific projects.

However, it has been reported that the U.S. side has requested profit and loss accounting to be handled separately for each project, and both parties are now working to adjust to a final investment structure.

When asked whether there had been any discussion about the umbrella SPV structure and project-specific settlement, Minister Kim declined to elaborate, saying, "Specifics are still under negotiation, so I ask for your patience."

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