Gov't unveils power, infrastructure plans to back megaprojects

Climate, Energy and Environment Minister Kim Sung-whan delivers a presentation during a public briefing on the government's megaprojects on artificial intelligence and semiconductor industries at Cheong Wa Dae in Seoul, Monday. Joint Press Corps

The government unveiled on Monday a sweeping infrastructure package under its megaproject initiative, pledging to accelerate electricity, water supplies and build corporate-led high-tech cities to anchor large-scale investments in those three areas.

The initiative centers on three flagship projects: an 800 trillion won ($585 billion) semiconductor expansion led by Samsung Electronics and SK hynix, a 550 trillion won artificial intelligence (AI) data center buildout backed by SK Group, GS Group and Naver and a nationwide push to commercialize physical AI through large-scale public-private investment.

To support the initiative, the government plans to expand infrastructure by delivering power and industrial water to key sites while overhauling the electricity grid to cope with surging demand from semiconductor fabs and AI servers.

“The Ministry of Climate, Energy and Environment will ensure that the 6.3 gigawatts of electricity and 650,000 tons of water needed for the southwestern semiconductor plants are supplied on time without disruption,” Climate, Energy and Environment Minister Kim Sung-whan said during a national investment briefing chaired by President Lee Jae Myung at Cheong Wa Dae in Seoul.

“We will likewise deliver more than 8 gigawatts of power in a timely manner to large-scale AI data centers in South Chungcheong Province, the Gyeongsang provinces, Jeolla provinces and Gangwon Province.”

The government will fast-track grid connections for the Yongin semiconductor cluster by maximizing existing transmission capacity and using underground cables where needed, while finishing integrated water projects ahead of schedule and raising reuse rates.

For the new chip complex planned in the country’s southwestern region, the government said it will draw on renewable and nuclear generation, with multipurpose dams and other alternative sources earmarked to secure process water.

AI data centers will receive tailored power supply based on location, using a mix of renewable energy, nuclear generation and fossil fuels.

The government also plans to disclose available capacity at 345-kilovolt substations, expedite grid impact assessments for data centers outside the Seoul metropolitan area and introduce dedicated electricity tariffs for AI data centers.

More broadly, it aims to strengthen the country’s power system by expanding renewable energy, aiming to reach a capacity of 100 gigawatts, as well as nuclear power, small modular reactors and storage, while reinforcing transmission networks to ensure reliable, on-time electricity for advanced industries nationwide.

The government also pledged to develop a new generation of corporate-led high-tech cities designed to translate private investment into long-term regional growth.

Unlike conventional industrial parks, the new developments will integrate manufacturing, research, housing, education, health care and cultural amenities into a single ecosystem.

Companies will be given greater flexibility in site selection and project development, while regulations on land use and urban planning will be eased.

Authorities also plan to upgrade transport links, targeting 30‑minute access from residential areas and one‑hour access to major logistics hubs. Fast‑track permitting and parallel approvals are expected to cut development timelines by more than half.

“These three megaprojects are the signature projects of this administration, and we are firmly committed to making them a success,” presidential chief of staff Kang Hoon-sik said during a press briefing.

“We will establish task forces for each regional project and use every available policy tool to support them.”

He added that the government would work to ensure companies have the infrastructure needed to invest domestically rather than overseas.

The announcement came amid intense criticism from opposition parties, particularly over the proposed expansion of semiconductor manufacturing into the southwest region.

Lawmakers from the conservative parties argued that decisions on factory locations should remain with companies rather than the government, questioning whether the region possesses sufficient power, water, workforce and industrial ecosystems to support advanced chip production.

Some even warned that government intervention in corporate investment decisions could undermine market principles.