Korea Electric Power Corp. has become the first South Korean power company to win a build-own-operate deal for a thermal power plant on U.S. territory following a competitive bidding process for a gas-fired project on the island of Guam.
The company, South Korea’s largest utility, teamed up with its Korea East-West Power Co. subsidiary to bid for the 200 MW combined-cycle Dededo project in a tender run by the Guam Power Authority.
Kepco will own a 60% stake in the facility while Korea East-West Power (EWP), which was spun-off from Kepco in 2001 along with four other thermal generation companies and a nuclear generation company, will own the remaining 40%.
The Korean consortium will build and finance the facility near Dededo, three miles northwest of Antonio B. Won Pat International Airport, and operate it for 25 years before transferring it to GPA ownership.
The GPA received 18 proposals for the project, including from Korea's Hanwha Energy Corp., Japan's Osaka Gas Co. and Istanbul-headquartered Karpower International, which had proposed a floating power plant.
Construction is set to start next May and the project is expected to be online in October 2022. Hyundai Engineering has won the engineering, procurement and construction contract for the $534 million project.
The need for the facility stems from federal clean air regulations which would have required costly upgrades to existing plants and from an August 2015 explosion and fire which took the island’s Cabras power plants offline. Guam has several diesel power plants dating from the 1970s and 1990s that are nearing the end of their lifespans.
In 2017, Kepco won a contract to build a 60 MW solar plant in the Mangilao region of Guam. With the addition of the Dededo plant, the South Korean company will supply about 55% of Guam's generation.
Kepco recently priced a $500 million five-year corporate green bond to finance the development of renewable energy and clean transportation (PFR, 6/17), although it did not say whether the proceeds would go towards projects in the U.S. or elsewhere.