South Korea plans sweeping public-sector overhaul with energy mergers and LH split

  • South Korea plans to restructure 109 public institutions through mergers, splits, consolidations and dissolutions.
  • The targeted institutions employ approximately 120,000 workers, while public-institution debt reached 769 trillion won at the end of 2025.
  • More than 80% of the targeted institutions require legal revisions, making National Assembly approval central to implementation.

South Korea is advancing detailed plans to merge five Korea Electric Power Corporation generation subsidiaries into a single legal entity tentatively named Korea Power Generation, with incorporation and executive appointments targeted by September next year and an official launch on October 1. The Ministry of Climate, Energy and Environment disclosed the additional integration details at a meeting on the 4th at KEPCO’s Southern Seoul Headquarters, a day after the government announced a broader overhaul of 109 of 342 public institutions through mergers, consolidations, dissolutions and a split of Korea Land & Housing Corporation. The five companies’ combined capacity is 53 gigawatts, ranking 14th globally and 8th excluding Chinese firms, and the integrated company would remain a wholly owned KEPCO subsidiary with four headquarters divisions, regional renewable-energy units and a thermal power headquarters. Headquarters staffing is expected to fall to about 1,800 from 2,400, with the 600 reduced positions redistributed to regional renewable-energy headquarters, while a new headquarters would be built because existing sites in Boryeong, Taean, Jinju, Busan and Ulsan are too small. The government plans a special law in the current National Assembly session covering the legal basis, employment and rights succession, simplified merger procedures, tax relief and a sought Fair Trade Commission combination-review exemption, and will form a preparatory committee this month. Parallel measures still include merging Korea National Oil Corporation and Korea Gas Corporation into a proposed Energy Resources Corporation, dissolving Korea National Coal Corporation, combining four regional port authorities and guaranteeing employment succession for about 120,000 workers, while debt treatment, headquarters location and regional impacts remain central challenges.

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