Korea Electric Power Proposes Five Years of Prepaid Bills to Samsung and SK Hynix

Korea Electric Power Corp. has proposed an unusual financing plan to Samsung Electronics and SK Hynix: pay five years of electricity bills in advance, totaling 25 trillion won.

Under the proposal, Samsung would prepay 20 trillion won and SK Hynix 5 trillion won. KEPCO calculated the amounts from the companies’ electricity bills last year, which stood at 4.1 trillion won for Samsung and 900 billion won for SK Hynix. The companies could spread the advance payments over about a year, while KEPCO would deduct their monthly bills from the prepaid balances.

The utility is also considering applying interest to the remaining balances at rates above government bond yields, then providing the benefit through future electricity-bill discounts. KEPCO plans to direct the money toward transmission and substation networks serving semiconductor industrial complexes and artificial-intelligence data centers.

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We have proposed the system to large electricity-demand companies such as Samsung Electronics and SK Hynix.

The need for new grid funding has grown as investment plans in semiconductor clusters in Yongin and the Honam region, along with AI data centers, have raised projected 2040 peak demand. The latest basic plan for electricity supply and demand added 20.6 gigawatts of demand from advanced industries including semiconductors and 7.9 gigawatts from data centers.

KEPCO also hopes the advance payments will ease its debt burden. Its debt rose from 205.6 trillion won at the end of last year to 210.7 trillion won at the end of June, while interest costs reached 2.1 trillion won in the first half. The utility said it had proposed the system to large power users, but no decisions had been made on whether the companies would participate or on the final terms.

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Participation, the prepaid amount and period, and the interest rate have not yet been finalized.