Korea Electric Power Corp. (KEPCO), South Korea’s largest electricity producer, on Wednesday broke ground on a solar power plant in Japan, marking its first entry into the overseas solar photovoltaic (PV) power market.

Kepco said it held a ground breaking ceremony for the 28 megawatts (MW) solar power plant in Chitose City in Hokkaido that will be built in concert with LG Industrial Systems Co. (LSIS ), Samsung SDI Co. and state-run Korea Development Bank (KDB). The ceremony was attended by Kepco CEO Cho Hwan-eik, LSIS CEO Koo Ja-kyun, KDB Project Finance Center chief Lim Maeng-ho and 70 other stakeholders at home and abroad.

This is the first offshore solar PV development project for Kepco, and the state-run power company will build, own and operate the plant in partnership with the local partners. The project is estimated to cost about 11.3 billion yen ($103 million), requiring the construction of about 130,000 solar PV modules nearby New Chitose Airport (Shin-Chitose Airport, CTS) by late 2017.

Kepco and its partners plan to take about 90 billion won ($79 million) worth loans via project financing from domestic financial institutions, including state-run KDB, Woori Bank, Samsung Life Insurance Co., the National Credit Union Federation of Korea (NACUFOK), and KDB Infrastructure Investments Asset Management Co. (KIAMCO). LSIS will be in charge of construction, as well as operation and maintenance of the solar power plant.

An unnamed official at Kepco said the company will run the plant for 25 years after the completion of the construction and would supply 317.4 billion won worth electricity to Hokkaido Electric Power Co., which is expected to generate about 64 billion won in dividend income over the cited period.

With the deal, 13 Korean companies including LSIS would be able to export around 50.5 billion won worth equipment, machineries and raw materials to Japan.

Kepco CEO Cho said the project will set a milestone in its collaborated efforts with other domestic firms to branch out into offshore solar power markets for the future.

By Park Yong-beom

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