Construction of 1 Trillion Won Hydrogen Fuel Cell Power Plant and Financial Holding Companies Join Forces

[Asia Economy Reporter Park So-yeon] Major domestic financial groups are launching a fund worth approximately 1 trillion KRW to secure project costs for the construction of the Tongyeong hydrogen fuel cell power plant.

According to the financial investment industry on the 12th, NH Nonghyup REITs Management plans to proceed with an investment agreement in the second half of this year for the construction of the Tongyeong hydrogen fuel cell power plant, together with Shinhan Financial Investment, Hana Financial Investment, Korea Gas Corporation, and Tongyeong City.

The hydrogen fuel cell power plant is scheduled to be built on a site of about 10,000 pyeong located in Gwangdo-myeon, Tongyeong City, Gyeongsangnam-do. The site is currently used by Korea Gas Corporation as an LNG receiving terminal, and NH REITs is reportedly in final negotiations with HSG Seongdong Shipbuilding, which holds ownership of the site.

The total project cost is approximately 1 trillion KRW, and NH Nonghyup REITs Management will lead the fund formation starting next year. Shinhan Financial Investment and Hana Financial Investment have confirmed their participation, while KB Securities and NH Investment & Securities are also considering joining.

NH side is actively engaging with energy-related companies such as Hanwha, SK, and Doosan as candidates to recruit strategic investors (SI). GNR has been selected as the project developer for the power plant construction. Investment cooperation is expected to expand to include Gyeongsangnam-do Province and Korea Electric Power Corporation in the future.

A hydrogen fuel cell power plant refers to a facility that first converts natural gas (LNG) into hydrogen and then produces electricity by reacting it with oxygen. Hydrogen fuel cell power generation is gaining attention as an eco-friendly energy source with low noise and the ability to generate power in a smaller area compared to solar or wind power. It is recognized for its carbon reduction effect compared to thermal power plants and has recently become a key investment target related to ESG (Environmental, Social, and Governance).

The government is promoting a major transition to renewable and hydrogen energy by 2022 as part of a comprehensive fine dust management plan, aiming to reduce domestic fine dust emissions by 30% and close nuclear and coal-fired power plants. Investment institutions are advancing hydrogen fuel cell power generation projects in line with this trend, and with substantial government support and benefits, private companies are applying nationwide for permits for hydrogen fuel cell power generation projects.

An official from the IB industry said, "As social demand for ESG-related investments has recently increased, major investment institutions are focusing on finding related investment destinations," adding, "Active participation from institutions and companies aiming to internalize ESG management is expected in the Tongyeong hydrogen fuel cell power plant construction project."

This content was produced with the assistance of AI translation services.