Ministry of Trade, Industry and Energy to Hold Electricity Committee Meeting on 23rd
Discussion on Major Shareholder Change Proposal for Solar Power Operators
The fate of the 'Taean Solar Power Project,' considered the largest of its kind in South Korea, will be decided on the 23rd at the Electricity Committee under the Ministry of Trade, Industry and Energy. With complex involvement from financial institutions that provided loans to construction companies currently working on-site, the attention of stakeholders is focused on this issue.
The Electricity Committee will hold a plenary session at 2 p.m. on the same day to review 24 agenda items, including the proposal for a change in the major shareholder of the Taean Solar Power Project operator. The key issue is whether the new major shareholder participating in the project can properly carry out this national grid solar project. A committee official stated, “After the meeting with nine members including the chairman, if there are disagreements, the decision will be made by a majority vote of the total members.”
The Taean Solar Power Project is the largest project in the country with a generation capacity of 306MW. The total site area reaches 6.15 million square meters, equivalent to 860 soccer fields. The total cost is 501 billion KRW, and once completed, it will supply electricity to 45,000 to 48,000 households based on a family of four. The company awarded the project rights is Taean Anmyeon Clean Energy.
The problem lies with the major shareholder of Taean Anmyeon Clean Energy. When securing the project, Taean Anmyeon Clean Energy raised 486 billion KRW through project financing (PF) and other loans. At that time, Taean Anmyeon Clean Energy explained to the financial institutions that “the major shareholder would be changed to an institution including a global investment firm.” The financial institutions required that the change of the major shareholder be completed within six months after operation begins as a condition for providing the loan.
However, on January 26, the Electricity Committee rejected the proposal for the change of the major shareholder of Taean Anmyeon Clean Energy. According to the Electricity Business Act, acquiring shares to control the management rights of a power generation business operator requires government approval. This measure is to exclude companies with poor capital or low creditworthiness, as electricity supply closely affects the nation’s economy and security.
The Ministry of Trade, Industry and Energy stated that the new major shareholder was deemed unqualified. A ministry official said, “It was judged that the applicant lacked qualifications, and there were remaining matters requiring permits beyond the share acquisition.”
Meanwhile, with the first change of the major shareholder failing, the financial institutions that had supported the funding have suspended the loans. The reason is that the agreed terms during loan negotiations were not fulfilled. As funding was cut off, payments to on-site construction companies have also been delayed. According to industry sources, companies that have not received payments are reportedly considering legal action.
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