New York: South Korean President Lee Jae Myung and US President Donald Trump have welcomed progress in discussions over South Korea’s planned investments in the United States, as the two countries work to implement a broader $350 billion investment package.
The leaders held a meeting lasting about 30 minutes in New York on September 22 on the sidelines of the United Nations General Assembly. South Korean National Security Adviser Wi Sung lac said the two leaders welcomed significant progress in discussions on strategic investment projects.
The meeting came as Seoul moves from a broad investment commitment towards identifying specific projects. South Korea has selected a gas fired power plant project in Texas as the first project it plans to pursue under the $200 billion strategic investment part of the package.
The proposed plant in Encinal, Texas, is expected to have a generating capacity of about 6.3 gigawatts and is valued at $22.3 billion. It is intended to meet rising electricity demand from semiconductor plants and artificial intelligence data centres in Texas.
However, the project is not yet a completed investment. Its implementation remains subject to further procedures and discussions over investment terms. South Korean lawmakers have also raised questions about the commercial viability of the project.
The wider investment package was outlined under a trade arrangement between Washington and Seoul. It includes $150 billion in planned South Korean investment in the US shipbuilding sector and another $200 billion for strategic investments in areas such as energy and other industries.
The two governments have spent months discussing how the $200 billion strategic investment component should be implemented. The Texas project is the first major project to emerge from those discussions, while several other proposals remain under consideration.
One proposal involves the construction of as many as eight nuclear reactors in the United States, including two based on South Korea’s APR1400 design. The broader nuclear investment plan has not yet been finalised.
South Korea is also considering acquiring a stake of between 5 percent and 10 percent in US nuclear technology company Westinghouse. Seoul is separately considering participation in the long delayed Alaska liquefied natural gas project. No final decision has been announced on that project.
The investment negotiations have also raised concerns in South Korea about the possible effect of large dollar payments on the country's currency and financial markets. Under the investment framework, annual funding for the strategic investment component is capped at $20 billion.
The two countries are also discussing several strategic issues beyond investment. According to Wi, Lee and Trump agreed to continue discussions on nuclear fuel reprocessing, nuclear powered submarines, shipbuilding and the transfer of wartime operational control of South Korean forces from the United States to South Korea.
North Korea was another important issue during the meeting. Trump reaffirmed his willingness to engage in dialogue with North Korea, according to the South Korean government.
The two leaders agreed to remain in close communication to help promote the resumption of dialogue between North Korea and the United States.
The latest meeting was the third summit between Lee and Trump and came as the two countries continue to expand cooperation on trade, investment, energy, shipbuilding, nuclear technology and security.
For now, the main development is progress towards implementing the investment framework rather than the completion of the entire $350 billion programme. The Texas power project has been identified, while several other major proposals remain under negotiation.
The next stage will depend on further discussions between the two governments and decisions on individual projects, including their financing, ownership and commercial terms.