The government of South Korea has decided to order Korea Electric Power Corp (KEPCO) to sell 10 hydropower and thermal power plants later this year through an international auction. At the same time, two plants, in Anyang and Puchon, owned jointly by KEPCO and regional power cogeneration corporations are also to be sold.
The sales will the first stage of a plan to privatize KEPCO. The state company will first be restructured, creating three divisions responsible for generation, transmission and distribution.
Privatization will take place in a step-wise fashion. When it is complete, KEPCO will remain in control of South Korea’s nuclear power plants.
Under the restructuring plan, the generation division of KEPCO will be split into a nuclear company and five to seven other affiliates. All these, except the nuclear company, are to be sold to the private sector by 2002. The first sale, of an affiliate controlling ten hydro and thermal plants is due to take place this year.
KEPCO’s distribution sector will be split into five or six regional distribution companies. These will be privatized between 2001 and 2002.
After 2003, when transmission has also been privatized, a competitive system will have been created. By 2009, a system of electricity retail sales competition is envisaged, giving consumers the option to select their power distribution company.
As a step towards privatization, the South Korean government is to sell a 5 per cent stake in KEPCO through global depository receipts. The government plans to sell the depository receipts through an international road show in cities such as New York, Hong Kong and London. The government hopes to receive $1 billion from the sale by the end of March.