August 25, 2020 Read More →

Pending South Korea legislation could force halt to country’s coal plant export deals

The Korea Economic Daily:

South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired plant deals under way at risk of being scrapped.

Late last month, four lawmakers from the ruling Democratic Party proposed a set of bills, aimed at prohibiting utility Korea Electric Power Corp. (KEPCO), two state-run Korean banks and the state trade insurance provider from financing foreign coal projects.

The draft bills concerning KEPCO, Korea Development Bank, Export-Import Bank of Korea (Korea EXIM) and Korea Trade Insurance Corp. are very likely to pass at the ruling party-controlled National Assembly next month.

Under the proposed bills, the four state-run entities will be prohibited from participating in the construction and operation of coal-fired power plants abroad, as well as extending the life of existing plants. After passing through the National Assembly’s regular session, the bills will take effect immediately.

South Korea is the world’s No. 2 coal power plant exporter in terms of orders received, winning $5.8 billion worth of orders between January 2013 and July 2020, according to EndCoal. China is the biggest coal power plant exporter for orders of $50 billion, nearly 10 times more than South Korea.

But the new legislation may herald the collapse of the relevant industry in Korea. In particular, Doosan Heavy would be hard hit by a ban on the country’s financing of overseas coal plants, as this accounts for half of its overseas business. The company has already suffered from the South Korean government’s policy to phase out nuclear power.

[Kyung-min Kang]

More: South Korea moves in on overseas coal project financing ban

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