Korea Electric Power Corp. President Kim Dong-cheol said a minimum increase in electricity rates will be necessary after 2027, when the utility's capacity to issue bonds shrinks. With rising power demand from advanced industries such as semiconductors and artificial intelligence requiring large-scale grid investment, he said borrowing alone can no longer cover the funding needs.
Speaking at a parliamentary audit held by the National Assembly's Trade, Industry, Energy, SMEs and Startups Committee on the 12th, Kim said, "For the portion not covered by our own revenue, we have so far relied on bond issuance or bank borrowing."
"Once the bond issuance multiple falls from five times to twice at the end of 2027, we will no longer be able to issue bonds. KEPCO's own cost-cutting (self-help) measures are needed, but I believe a minimum increase in electricity rates is also necessary," he said. The cap on KEPCO bond issuance currently stands at five times equity capital but will be lowered to twice at the end of 2027.
Kim stressed that grid investment cannot be delayed even as financial conditions remain difficult. "Financial conditions are difficult in many respects, but we are placing grid investment at the top of our priorities," he said, explaining that funds not covered by internal revenue have been raised through bond issuance and bank loans.
Demand for grid construction that KEPCO must shoulder is indeed growing as investment in advanced industries expands. About 1.4 trillion won ($980 million) is set to be spent on the first phase of power supply facilities alone to enable the initial operation of the Honam semiconductor cluster in 2029. The project involves building roughly 20 to 25 kilometers of 345-kilovolt transmission facilities.
Including that project, KEPCO faces the need to expand transmission and substation investment in line with growing power demand. Kim's remarks are seen as underscoring that self-help cost-cutting measures alone may not be enough to fund the required grid investment if the company's ability to raise money through bond issuance diminishes.