Bank of China contributes to ₩3.3 trillion KRW syndicated loan facility to Pospower for the 2100 MW Samcheok Blue Coal-Thermal Power Plant Construction Project

Project narrative

In late June or early July 2018, a syndicate of 28 lenders — including the Bank of China (BOC) — entered into a ₩3.3 trillion KRW syndicated loan facility to Pospower Co., Ltd. (now Samcheok Blue Power Co.,Ltd) — then, the South Korean coal arm of South Korea's biggest private energy company, POSCO Energy — for the 2100 MW Samcheok Blue Coal-Thermal Power Plant Construction Project. BOC joined the facility as an arranger during syndication. The following institutions also played the following roles on the loan: DB Insurance (joint mandated lead arranger); Hanwha Life Insurance (joint mandated lead arranger); Industrial Bank of Korea (joint mandated lead arranger); KEB Hana Bank (now Hana Bank Co., Ltd.) (joint mandated lead arranger); Korea Development Bank (KDB) (joint mandated lead arranger); Kyobo Life Insurance (joint mandated lead arranger); Nonghyup Bank (joint mandated lead arranger); Samsung Fire & Marine Insurance (joint mandated lead arranger); Samsung Life Insurance (joint mandated lead arranger); Shinhan Bank (joint mandated lead arranger); Woori Bank (joint mandated lead arranger); ABL Life Insurance (arranger); DGB Insurance (arranger); Hanwha General Insurance (arranger); Heungkuk Life Insurance (arranger); Hyundai Marine & Fire Insurance (arranger); IBK Insurance(arranger); KB Insurance (arranger); KDB Life Insurance (arranger); Korean Federation of Community Credit Cooperatives(arranger); Lotte Non-Life Insurance (arranger); Meritz Fire & Marine Insurance (arranger); Mirae Asset Life Insurance (arranger); National Credit Union Federation of Korea (arranger); Nonghyup Property & Casualty Insurance (arranger); Shinhan Life Insurance (arranger); and Tong Yang Life Insurance (arranger). The proceeds of the loan were to support construction and operation costs for the 2100 MW Samcheok Blue Coal-Thermal Power Plant Project, located in Samcheok, South Korea. The steam turbine plant can run on dual-fuel, though its primary fuel is bituminous coal. The plant was divided into two units: 1,050 MW unit one which planned to begin commercial operations in October 2023 and 1,050 MW unit two which was slated to begin commercial operations in April 2024. Unit one reportedly reached commercial operations in May 2024, and unit two followed in January 2025. However, local reporting indicates that plant outages and power disruptions are common into mid-2025. POSCO Engineering & Construction (now POSCO E&C) and Doosan Enerbility provided engineering, procurement, and construction (EPC) services. Pospower Co., Ltd. changed its name to Samcheok Blue Power Co. Ltd. in 2020, and is now jointly owned by POSCO Holdings Inc (34.0%), Doosan Enerbility Co Ltd (9.0%), and NongHyup Bank. The plant is owned and operated by Samcheok Blue Power Co Ltd. Industry sources estimate the full cost of the project as ₩4.9 trillion KRW, and report that the plant was financed by 20% equity and 80% debt. However, after the initial loan, the plant had difficulty raising more financing. In June 2021, Samcheok Blue Power Co., Ltd. did not receive any bids for a three-year bond for the project despite a coupon of 3.188%. The approval of the Pospower plant came shortly before Korean officials began publicly considering phasing out coal, with the National Assembly floating the idea in September 2022 following a nationwide petition which garnered 50,000 signatures. However, there are no national codified commitments to phase out coal energy. The construction of the plant was met with protests from environmental groups as well as K-pop fans, who protested the construction of the plant as it is proximate to Maengbang beach, where the band BTS photographed for their 2021 song, "Butter." Protesters cited concerns of pollution and erosion. The plant is forecasted to operate for 30 years, with a planned shut down date in 2054.