[Exclusive] LS Group Enters Himalayan Power Business

Expansion into Bhutan's Hydropower-Based New City
LS to Provide Integrated Supply from Power Grid to Distribution

LS Group has entered the power infrastructure development business based on Himalayan hydropower. With global big tech companies (large information technology firms) such as Amazon and Microsoft planning to build data centers near the India-Bhutan border, LS Group anticipates a surge in power demand and has decided to establish a power supply system in the region. Amid rising U.S. tariff barriers and escalating tensions with China, LS Group is materializing its strategy to use a third country?with political neutrality and an energy self-sufficiency base?as a new axis of growth.

According to the business community on May 7, LS Group will sign a joint venture agreement this week at its headquarters in Yongsan-gu, Seoul, with GIDC (Gelephu Investment and Development Corporation), a Bhutanese state-owned enterprise. GIDC is a public development agency established by royal charter of the King of Bhutan, leading new city development projects centered on the southern Gelephu region. LS plans to open a local office in July and begin full-scale business preparations.

This new city is a national project promoted by the Bhutanese government and royal family, and will be developed on the Indian border at a scale four times larger than Singapore. The city is planned as an integrated urban complex emphasizing ecological and spiritual harmony, featuring a power grid based on hydropower, low-rise wooden buildings, an electric vehicle-only transportation system, an international airport, universities, hospitals, and meditation and cultural facilities.

LS intends to supply power infrastructure such as cables, transformers, and communication cables to the city and participate in building its initial infrastructure. Given that global big tech companies like Amazon and Microsoft are considering establishing data centers in the region, demand for infrastructure is expected to be significant. LS Group aims not only to provide power infrastructure but also to supply various daily necessities, thereby establishing a comprehensive distribution and procurement system.

Bhutan secures cheap and stable electricity through hydropower based on Himalayan glaciers, exporting some of this power to India. An industry official stated, "The opportunity to supply power infrastructure to a country that exports electricity is significant," adding, "It is a strategy to design the structure from the stage where the power grid and urban functions are being established."

LS places particular significance on entering the market by building a power grid based on eco-friendly electricity. As carbon-free power generation is attracting global attention, the company believes that cooperating with countries with low carbon emissions centered on hydropower will allow it to preemptively secure a sustainable energy supply chain. The company is also seen as having established a strategic foundation to absorb the demand from global companies responding to carbon regulations.

LS's project in Bhutan is also meaningful in that it accelerates its strategy to expand into third countries. LS is expanding into other emerging markets, such as by sending a due diligence team to Ukraine to explore postwar reconstruction demand.

LS is currently in discussions with senior officials from Ukraine's Ministry of Agriculture regarding the supply of tractors, energy storage systems (ESS), agricultural machinery, and the establishment of agricultural corporations. The company is also considering participating in energy businesses related to the refining of edible oil and sustainable aviation fuel (SAF), leveraging Ukraine's status as the world's largest producer of sunflower oil. LS is concretizing plans to build an integrated infrastructure system linking storage, refining, and logistics.

A senior official at LS Group stated, "With the U.S. reorganizing industries around its own market and China strengthening its domestic self-sufficiency, our path forward ultimately lies in third countries. We must create new markets by directly supplying infrastructure and designing the structure ourselves."