KEPCO Surpasses Total Debt of 200 Trillion Won for the First Time... Increased by 8 Trillion Won This Year Alone

Possibility of Korea Electric Power Corporation Bond Issuance Limit Exceeding with 7 Trillion Won Deficit This Year

The debt of Korea Electric Power Corporation (KEPCO) has surpassed 200 trillion won for the first time in history.

According to KEPCO's semi-annual report on the 22nd, the total consolidated debt as of the end of June this year is 201.4 trillion won. It exceeded 200 trillion won for the first time ever.

KEPCO's debt was around 132.5 trillion won until the end of 2020. It surged to 145.8 trillion won at the end of 2021 and 192.8 trillion won at the end of 2022. This year, it increased by about 8 trillion won, surpassing 200 trillion won.

The sharp increase in debt is due to operating losses exceeding 47 trillion won since 2021. This is because the rise in international energy prices, driven by factors such as the Russia-Ukraine war, was not fully reflected in electricity rates.

KEPCO recorded operating losses again in the second quarter of this year, marking nine consecutive quarters of deficits. Operating losses in the first half of this year alone reached 8.5 trillion won. However, securities analysts expect KEPCO to exit the deficit in the third quarter but forecast an annual operating loss of about 7 trillion won for this year. If this forecast becomes reality, KEPCO may face difficulties in raising funds next year, including issuing new KEPCO bonds.

According to the Korea Electric Power Corporation Act, KEPCO can, in principle, issue KEPCO bonds up to five times the sum of its capital and reserves. As of the end of last year, KEPCO could issue bonds up to 104.6 trillion won, which is five times the sum of capital and reserves (20.92 trillion won), but as of the end of last month, the outstanding KEPCO bonds amounted to 78.9 trillion won. However, if operating losses of around 7 trillion won occur this year, the KEPCO bond issuance limit for next year will be reduced to 70 trillion won, which is lower than the current outstanding amount.

(Photo) [Image source=Yonhap News]