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| Korea Electric Power Corp. Chief Executive Cho Hwan-eik, third from left, cuts a tape at a ceremony to celebrate the completion of a gas-fired power plant in Mexico, Tuesday. Other participants include Samsung C&T Executive Vice President Kim Jeong-soo, far left, and the Chihuahua Provincial Government Economic Minister Manuel Russek, fourth from left. / Courtesy of KEPCO |
By Choi Kyong-ae
Korea Electric Power Corp. (KEPCO) is making a stronger push into emerging markets to help boost its bottom line, the state-run utility said Wednesday.
In a consortium with Samsung C&T from Korea and Techint from Mexico, KEPCO has built a gas-fired combined cycle power plant in Chihuahua in its first project in Latin America, the company said in a statement.
"We will turn Latin America into a major market along with the Philippines and the Middle East that includes Jordan, the United Arab Emirates and Saudi Arabia," KEPCO spokesman Jeong Young-kwun said by telephone.
The KEPCO-led consortium won the $430 million project in August 2010 from the Mexican electricity authorities. Then, the Mexican government agreed to purchase most of the electricity produced at the KEPCO facility for approximately three decades, the statement said.
KEPCO expects to earn about $210 million over the next 25 years from operating the 433 megawatt power plant.
"We will be aggressively participating in future bids for power plant projects offered by the Mexican government. Based on projects in Mexico, we are targeting to enter other Latin American markets," KEPCO Chief Executive Cho Hwan-eik said in the statement.
KEPCO said it is in talks with the Mexican government to win another gas-fired plant deal. "The bid for the project is coming and we plan to form a consortium to join it," the spokesman said without providing specific details.
Meanwhile, to reduce its reliance on electricity generated by fossil-fuel fired power plants, the Mexican government is seeking to build additional nuclear power plants, according to the statement. The country currently runs two nuclear plants which generated 3.4 percent of its total energy needs in 2012.
Nearly 73 percent of its overall electricity is generated from fossil fuels, and the government is considering two options to cut its heavy dependence on these.
One is to build 10 nuclear power plants by 2028 to supply 28 percent of its total power demand; the other is to build eight by 2025 to provide 12 percent, according to the statement.
"As Mexico has not offered any detailed plans regarding the nuclear projects, we are not giving serious consideration to them yet," said an official with KEPCO's Overseas Project Management Department. "We will focus on winning orders to build fossil-fuel plants and renewable energy projects such as a wind-power plant for the time being."
KEPCO owns a 56 percent stake in the Chihuahua project, followed by Samsung C&T with 34 percent and Techint with 10 percent. In 2010, the KEPCO consortium beat rival consortiums from Spain and Japan, which had traditionally dominated the Mexican market.
"Advanced plant operating capabilities will help win additional orders in Mexico. But language barriers remain a challenge for Korean companies as Mexico has Spanish as an official language for all contracts," the spokesman said.
In 2013, KEPCO posted 174 billion won ($162 million) in net profit, shifting from a loss of 3.08 trillion won a year earlier.
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