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| Korea Electric Power Corp. (KEPCO) CEO Cheong Seung-il, third from left, speaks during a meeting attended by KEPCO affiliates and subsidiaries at the KEPCO Art Center in Seoul, Friday. Yonhap |
By Lee Kyung-min
Debt-ridden Korea Electric Power Corp. (KEPCO) plans to sell non-essential assets and cut expenditures to secure 20 trillion won ($16 billion) over the next five years as part of an emergency austerity measure to offset snowballing operating losses, the state-run firm said, Friday.
Propelling the rushed effort to fortify financials is the recent spike in heating costs due to raised gas and electricity prices.
Russia's prolonged invasion of Ukraine has pushed up global key commodity prices, fanning concerns about a full-fledged energy crisis. Korea, which relies on imports for over 93 percent of its energy needs, is taking a direct hit from the geopolitical conflict.
CEOs of KEPCO and its subsidiaries and affiliates had a meeting Friday to spearhead the plan whereby the largest state-run firm will aim for a financial statement 14.3 trillion won healthier compared to last year. Its other subsidiaries and affiliates will see an improvement of 5.7 trillion won.
They will sell off 2.9 trillion won worth of non-core assets, reduce redundancies to streamline projects (5.6 trillion won), cut spending (3 trillion won), increase profit (1.1 trillion won) and increase capital (7.4 trillion won).
The efforts will be underpinned in part by expansion of public-private partnerships to expedite joint overseas projects. Chief among them are construction of nuclear reactors, as well as businesses concerning hydrogen energy and offshore wind power systems.
KEPCO CEO Cheong Seung-il said the latest plan aims to address financial soundness concerns and seek timely measures.
"We will continue seeking measures to overcome the unprecedented recent crisis brought on by rapid deterioration of financial sustainability," he said.
"KEPCO and its state-run partner firms will mobilize utmost efforts to bolster exports of Korea's power generation systems, including nuclear energy and new growth driver energy sources."
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