Korea Electric Power Corporation (KEPCO) said it has proposed a prepaid electricity-bill program to large electricity-demand companies, including Samsung Electronics and SK hynix. The reported proposal is approximately ₩20 trillion for Samsung Electronics and ₩5 trillion for SK hynix, for a total of ₩25 trillion, and is understood to involve prepaying five years of electricity bills.
Key Change
The purpose of the proposal is to use the prepaid funds to finance power-grid construction for the Yongin and Honam semiconductor clusters. KEPCO proposed securing the funding needed to expand the power grid for semiconductor-related demand, which is expected to be substantial, through companies’ prepaid payments.
Current Status
Although key figures have been reported, no final contract has been signed. KEPCO said that details including whether companies will participate, the interest rate, the prepaid amount, and the prepayment period have not been finalized.
What is currently confirmed is the proposal of a prepaid-payment program and negotiations over its terms—not confirmed payment amounts for each company or a final contract.
Yonhap News Agency reported that one option under discussion would apply interest above the yield on two-year Korean Treasury bonds and pay the interest through semiannual deductions from electricity bills instead of in cash. Another report, citing KEPCO’s explanation, said an interest-rate proposal could add 15 basis points to the Korean Treasury yield and that prepaid funds could be collected monthly through the end of 2027. These details, however, have also not been finalized as the definitive terms.
Impact
The prepaid funds are expected to partially replace demand for KEPCO bond issuance. However, this is an explanation or outlook regarding the financing effect; it cannot be taken as confirmation that KEPCO’s debt will immediately decline by the amount prepaid.
According to Yonhap News Agency, KEPCO’s total debt stood at ₩210.7 trillion as of the end of June 2026, while its daily interest expense was ₩11.5 billion. This financial burden was cited as background to the attention surrounding the prepaid-payment discussions.
What to Check Next
The following points remain to be confirmed:
- Whether Samsung Electronics, SK hynix, and other target companies will actually participate
- The prepaid amount and applicable period for each company
- The final interest rate and method of interest payment
- How the prepaid funds will be invested in power-grid construction
- Whether KEPCO or the Ministry of Trade, Industry and Energy will publish a separate official document confirming the terms
As of the scope checked on September 3, 2026, no separate official document from KEPCO or the Ministry of Trade, Industry and Energy confirming the final execution of the prepaid contracts, the companies’ finalized payment amounts, or the final interest rate and term could be found.