South Korea’s U.S. investment plan faces scrutiny over leaks and profitability

  • South Korea’s opposition parties challenged the U.S. investment plan’s profitability, oversight and leaked negotiation terms.
  • The Encinal Texas plant is projected to recover about $45 billion over 20 years, but its power purchase agreement remains unsigned.
  • The government said only Encinal was approved to proceed, while eight reactors, Alaska LNG and Westinghouse terms remained unfinalized.

South Korea’s Democratic Party and People Power Party are challenging separate aspects of the government’s strategic U.S. investment plan after confidential parliamentary briefings were leaked. The Democratic Party announced legal action over the disclosure of negotiation details, while the People Power Party questioned the commercial-rationality finding underpinning a reported $350 billion plan. The first project is a gas-fired combined-cycle power plant in Encinal, Texas, which the government says could recover about $45 billion over 20 years by supplying electricity to artificial intelligence data centers and other customers. Critics note that the central power purchase agreement has not been signed and that no U.S. government commitment to conclude one has been secured. Earlier briefing materials described the overall plan as $200 billion-scale and included the Texas plant, eight U.S. nuclear reactors and an Alaska liquefied natural gas project. Leaked terms reportedly required South Korea to bear all Texas construction costs while receiving an initially equal equity share, with a possible long-term split of 90% for the United States and 10% for South Korea; a proposed Westinghouse stake was also reduced to non-voting minority status, although negotiations continue. The government says only the Encinal project has been approved to proceed, that nuclear and Alaska LNG plans remain unfinished, and that profits would be split 50-50 until principal and interest on all U.S. projects are recovered. Under the relevant strategic-investment law, commercially rational projects require only a report to the National Assembly, while projects lacking that designation require parliamentary consent before negotiations begin.

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