“We consulted with the U.S. to ensure the Encinal project pays no taxes”

The Korea-U.S. Strategic Investment Corporation endorsed moving ahead with Project Star, its first U.S. investment project. It said another prospective U.S. investment, the Alaska liquefied natural gas (LNG) project, is still under review and has not yet been decided.
Park Jong-won, president of the Korea-U.S. Strategic Investment Corporation, said at the National Assembly Finance and Economy Committee’s audit of the corporation on the 20th, “We supported Project Star,” adding, “We agreed with the Project Management Committee’s analysis and review findings.”
Project Star is a gas-fired combined-cycle power plant project in Encinal, Texas, U.S. With a total project cost of $22.3 billion, it will build a 6,472-megawatt power plant to supply electricity to artificial intelligence (AI) data centers and other facilities.
On the 1st, the Korea-U.S. Strategic Investment Corporation transferred its first U.S. investment funds, $2.4 billion, to the United States. The government expects to recoup between $43 billion and $45 billion over the next 20 years. Park said, “When we consulted with the U.S., the arrangement was that no taxes would be paid,” adding, “If taxes are imposed, there is a gross-up clause that provides for a refund.”
The corporation says it is also prepared for risks that could arise even after the project’s commercial feasibility has been assessed, such as rising interest rates, increased construction costs and delays in completion, but it did not disclose details. Park said, “Protective clauses are included in the contract, but it is difficult to disclose them.”
The assessment is that commercial viability can be ensured despite uncertainties over signing a long-term power purchase agreement (PPA) and securing buyers for the electricity. Park said, “We are continuing to pursue contracts for the PPA and other matters we need to put in place,” adding, “I understand the review found that the project falls within a reasonable range, based on assumptions about current electricity prices and demand in Texas.”
The Alaska LNG project, which U.S. President Donald Trump has repeatedly said will succeed while pressing South Korea to invest, remains under review. Park stressed, “The review of the Alaska project has not yet been completed,” adding, “I think we can make a decision only after its commercial viability and various other matters have been reviewed.”
Asked about plans to transfer the $10 billion investment in a nuclear power project, one of the U.S. investment projects, Park said, “The joint statement by the two countries says this is contingent on all procedures required domestically and commercial viability being satisfied,” emphasizing, “The corporation will be the entity making the transfer.”
He also signaled his resolve to take full responsibility for managing risks in the U.S. investment projects. Park said, “The Risk Management Committee will continue to manage risks for projects once they have been approved,” adding, “During the project selection process, the Project Management Committee and the Steering Committee continued to meet, and there were also reports to the National Assembly. We did our best to review the risks throughout that process.”
He also outlined plans to bolster staffing. Of the Korea-U.S. Strategic Investment Corporation’s 50 authorized positions, 32 are currently filled, including 11 specialists such as lawyers and accountants. Park said, “We will continue to hire legal experts in-house, and we also plan to engage major legal advisory firms to manage matters systematically.”
[email protected] Seo Young-jun Reporter