The government told the National Assembly on the 22nd that it has selected the construction of the Encinal gas-fired combined-cycle power plant in Texas as the first project under its strategic investment program in the United States. The project carries a total cost of $23.2 billion (about 31 trillion won), to be paid in stages. Talks will continue on the construction of eight large nuclear reactors in the United States and on a liquefied natural gas development project in Alaska. Under discussion is a plan to include two Korean-designed APR1400 reactors among the eight and to acquire a 5% to 10% stake in Westinghouse at 10% below the price set in its initial public offering.
With the first U.S. investment project confirmed, the disbursement of funds is expected to begin in earnest. The government concluded that the deal has "commercial rationality" because it can recover $43 billion to $45.4 billion from the Encinal plant over 20 years. But that is only a projection that holds if power demand, construction costs and utilization rates all stay on plan. The feasibility of data center construction plans and whether long-term power purchase agreements can be secured must be verified thoroughly from the outset. The nuclear project, for which the U.S. side has proposed $120 billion in spending, requires an even stricter assessment of investment safety. The commercial viability of each reactor and the risks of construction delays and cost overruns must be examined closely, and the agreed principles for sharing returns must be upheld. Responsibility in the event of losses and the order in which invested funds are recovered must also be made clear. On the Westinghouse stake, Korea must secure substantive concessions beyond price, including voting rights, a role in management and a resolution of intellectual property issues. Nor should the burden be shifted onto state-owned enterprises already in poor financial condition.
Investing in the United States is a choice made to ease U.S. tariff pressure, but it should also be used as an opening to expand Korean companies' access to the U.S. market and strengthen their global competitiveness. Success or failure will depend on how much control Korea secures in each project and how stable a revenue structure it can build. Korea should widen order opportunities for domestic companies in fields where they are competitive, such as gas turbines, transmission and distribution equipment and power grids, and expand into areas such as data center construction. Above all, Korean companies taking part in nuclear construction in the United States must avoid being reduced to mere subcontractors for Westinghouse. Only then can the vast investment in the United States serve as a springboard to lift Korea's nuclear industry to a higher level. With $23.2 billion committed to the very first project, the government must defend both its leading role and the commercial soundness of the venture to the end.
