Korea eyes energy for 1st project under $350 bil. US investment plan: finance minister
Gov't to double FX borrowing, cash pooling limits for foreign banks
Finance Minister Koo Yun-cheol, left, shakes hands with James Kim, chairman and CEO of the American Chamber of Commerce in Korea (AMCHAM), ahead of a luncheon hosted by AMCHAM at Grand Hyatt Seoul, Wednesday. Courtesy of Ministry of Finance and Economy
The energy sector is being considered for Korea's first project under its $350 billion investment commitment to the United States, Finance Minister Koo Yun-cheol said Wednesday.
Speaking at a luncheon hosted by the American Chamber of Commerce in Korea (AMCHAM), Koo said the launch of the Korea-U.S. Strategic Investment Corp. (KUIC) in June provided the institutional framework needed to put the investment plan into action. He called for companies from the two countries to work together to identify commercially viable projects that would benefit both sides.
“Energy appears to be one of the areas attracting significant interest,” Koo said, noting that securing sufficient and affordable energy would be critical as power demand grows with the expansion of artificial intelligence (AI).
“Combining Korea’s engineering expertise with U.S. knowhow could create mutually beneficial opportunities,” Koo added.
Regarding complaints from the U.S. Department of Commerce over the delayed selection of the first investment project, Koo stressed that “there is absolutely no intention to deliberately delay the process.”
He said the government would work to identify a project that benefits both countries and move ahead with it as soon as possible.
Under an agreement reached at a Korea-U.S. summit held last October in Gyeongju on the sidelines of the Asia-Pacific Economic Cooperation summit, Seoul pledged $350 billion in investment in Washington, while the U.S. agreed to cut tariffs on Korean imports to 15 percent from 25 percent. While $150 billion of the commitment has been allocated to shipbuilding, the remaining $200 billion has yet to be assigned to specific projects.
The latest luncheon served as a follow-up to AMCHAM’s Special Report: Korea’s Financial Hub Agenda, which outlined measures to develop Korea as a global financial hub and was submitted to the Korean government in April.
During the event, Koo also outlined efforts to bring Korea’s capital and foreign exchange markets closer to global standards, including corporate governance reforms and measures to promote the international use of the won.
In particular, Koo said the government will raise the reporting threshold for foreign currency borrowing by foreign bank branches and the limit for cash-pooling arrangements from $50 million to at least $100 million, reflecting recommendations in AMCHAM’s special report.
The move is aimed at easing regulations governing foreign banks’ funding and liquidity management in Korea and improving their access to the domestic financial market.
AMCHAM Chairman and CEO James Kim, for his part, said Korea is emerging as a key player in the global AI transformation.
“The growing global prominence of companies such as Samsung Electronics and SK hynix reflects Korea’s remarkable economic transformation and underscores the opportunity for Korea to establish itself as a leading hub for investment, innovation, finance and business,” Kim said.
He added that the next phase of the U.S.-Korea economic partnership should focus on concrete investment in strategic industries, expanded technology cooperation and closer regulatory coordination, particularly in the digital sector.