"Construction and Investment Too"...Record High Overseas Investment Development-Type Orders [2025 Overseas Construction]

Annual Contracts Exceed 5 Billion Dollars
Advantages Include Profitability and Local Base Expansion

Last year, the overseas investment and development-type (PPP) project contract amount exceeded 5 billion dollars, marking the largest scale since statistics began. As the government emphasizes a paradigm shift from simple contracting to investment and development in securing orders, the construction industry is also gradually increasing PPP projects in line with this trend.

Daewoo E&C's Star Lake New City under construction in Hanoi / Photo by Yonhap News

According to the Overseas Construction Association on the 17th, last year's overseas investment and development-type project contract amount was 5.167 billion dollars, accounting for 13.9% of the total contract amount (37.114 billion dollars). This is more than three times the previous year (1.464 billion dollars) and the largest since related statistics began in 1966. Previously, the largest amounts were 3.398 billion dollars in 2008 and 3.18 billion dollars in 2011.

Major cases include Incheon International Airport Corporation winning the development and operation project of Ninoy Aquino International Airport in Manila, Philippines, and GS Engineering & Construction securing investment and development-type projects such as water treatment in Brazil and Oman. In the United Arab Emirates (UAE), Korea Western Power Co. broke ground on the Azban 1500 MW solar power project.

Investment and development-type projects are evaluated to have advantages in terms of profitability and local base expansion. Although there is an initial financial burden at the early stage of the project, companies can earn operational profits by handling maintenance after construction. On the other hand, contracting-type projects may not receive construction fees depending on the client's financial situation, and intensified competition among construction companies can lead to 'low-price bidding.' In particular, investment and development-type projects have 2 to 3 times higher profitability than contracting projects. Also, in the case of new town development, a single brand can be established.

An official from a construction company said, "Although investment and development-type projects do not mean there are no geopolitical or political risks, domestic companies can finance them at a manageable level without major difficulties," adding, "Client countries are actively moving as infrastructure expansion is urgent."

Daewoo E&C's 'Starlake City' in Hanoi, Vietnam, is a representative case where a domestic construction company successfully developed a new town overseas with 100% equity. New town development is often pursued in joint ventures with local companies, but Daewoo E&C directly handled project planning, implementation, construction, and operation. Daewoo E&C is leveraging its momentum in Hanoi to Thai Binh Province. In the second half of this year, it plans to build the 'Forest Starlake' complex in the Kien Giang new town, scheduled for sale in the first half of 2027.

Bando Construction is conducting its own development project in Los Angeles (LA), USA. After completing the 'The BORA 3170' residential-commercial complex project in March 2023, it started the 'The BORA 3020' project last year. The plan is to proceed with up to the fourth phase to create 'U-BORA Town' with about 1,000 households.

Another construction company official said, "When promoting large infrastructure projects, the government tends to prefer private financing due to fiscal burdens," adding, "From a long-term perspective, moving toward investment and development-type projects is the right approach."

The government is determined to open the era of 2 trillion dollars in cumulative overseas construction orders based on the expansion of investment and development-type projects. South Korea surpassed 1 trillion dollars in cumulative overseas construction orders last year, 59 years after starting overseas construction orders in 1965. Park Sang-woo, Minister of Land, Infrastructure and Transport, said, "Our companies are seeking new growth engines beyond the traditional construction industry framework in overseas construction markets, such as urban development and railroads," adding, "The government will actively support them to lead the 2 trillion dollar era of overseas construction through K-City and K-Rail exports and investment and development-type projects."