[Exclusive] Solar Panels Purchased with ODA Budget... Left Abandoned for 3 Years in a Warehouse in Chungcheongdo

ODA Status Analysis [K Wonjo Tracker]③
76 Types of Solar Power Equipment Bought with Taxpayer Money Stored in 20 Korean Warehouses
Cannot Be Sent to Myanmar, Rent Also Paid

The government has been found to have left 76 types of solar power equipment and 20 other materials, purchased under the name of Official Development Assistance (ODA), abandoned for three years in domestic warehouses located in Chungcheong Province, Jangseong in Jeollanam-do, Gangseo in Busan, and Siheung in Gyeonggi Province, instead of delivering them to the recipient country (the country receiving aid from Korea).

The recipient country is Myanmar, where South Korea suspended its grant aid immediately after the military coup in February 2021. Although the Office for Government Policy Coordination issued a directive in October of the same year to "suspend aid to Myanmar unless otherwise instructed," the Korea Institute for Industrial Technology Promotion (hereinafter Industrial Promotion Institute) under the Ministry of Trade, Industry and Energy ignored this and purchased equipment such as solar modules starting in November.

On the 25th, a joint investigation conducted with the office of Lee Jong-bae, a member of the National Assembly’s Industry, Trade, and Small and Medium Enterprises Committee from the People Power Party, revealed that solar modules, structures, inverters, and other equipment worth a total of 941 million KRW have been scattered and stored in warehouses of domestic implementing agencies located in Chungcheong Province from 2021 to the present in 2023.

Statement of Audit Explanation Submitted by a Korea Institute for Advancement of Technology Official to the Board of Audit and Inspection

76 Types of Solar Equipment Left Abandoned for 3 Years

The equipment was purchased as part of the "Myanmar Energy Self-Sufficient Village Construction Project" (2019?2022, total project cost of 5.75 billion KRW) carried out by the Korea Institute for Industrial Technology Promotion under the Ministry of Trade, Industry and Energy since 2019. These pieces of equipment are stored in two locations in Jangseong-gun, Jeollanam-do; 14 locations in Chungcheong Province; three locations in Songjeong-dong, Gangseo-gu, Busan; and one location in Siheung, Gyeonggi Province. The likelihood of the "Myanmar Energy Self-Sufficient Village Construction Project" resuming is slim, making these costs likely sunk expenses.

The basis for project implementation has also disappeared. Following the Myanmar coup in 2021, the project was excluded from the "Comprehensive Implementation Plan" approved by the International Development Cooperation Committee in 2023. As bloody suppression and human rights abuses occurred in Myanmar, major advanced countries such as the United States and Japan cut off aid. South Korea announced the suspension of aid in October of the same year. This was because the budget paid by taxpayers could be used to maintain the military regime rather than benefiting the people of developing countries.

The project’s resumption is uncertain as the dialogue channel to conclude the basic aid agreement, the memorandum of understanding, was severed due to the coup.

LED Equipment Stored in Paid Warehouses for 3 Years

LED equipment related to the "Myanmar LED Lighting Infrastructure Support" project has also been stored in a warehouse in Gimpo for 1,059 days since 2020 under paid storage. The daily rental fee is 30,740 KRW. So far, about 32.55 million KRW has been spent on storage fees. The implementing agency was selected on June 2, 2020, with personnel expenses of 218 million KRW and other budgets of 775 million KRW spent, but as of September 27 this year, the memorandum of understanding has yet to be concluded.

There are other cases where paid storage fees have been incurred. One example is the "Hybrid Power Supply Construction Support Project in the USME Area, Bogot?, Colombia" (total project cost of 13.378 billion KRW). Equipment was purchased before the memorandum of understanding was signed, resulting in storage costs of 90,000 KRW per day for 169 days (totaling 15.21 million KRW) at a warehouse located in Dong-gu, Ulsan Metropolitan City. The memorandum of understanding was only signed on August 17 of this year, more than three years after the implementing agency was selected on May 28, 2020.

Experts have pointed out that such actions are inconsistent with the norms of aid. Jae-kwang Han, CEO of Power Alternatives PIDA, said, "Conducting projects without following the agreed process is problematic. For Korean international development to advance, aid projects must be implemented within established institutional norms."

Budget Execution Before Signing Memorandum of Understanding Due to Practice

According to the explanation submitted by the Industrial Promotion Institute to the Board of Audit and Inspection, the officials explained that it was "to ensure smooth project implementation." An official who received a "reprimand" stated in their explanation to the Board of Audit and Inspection, "At the time in 2019, when the prolonged Myanmar situation could not be predicted, not considering the non-use of the carryover budget was intended to enable prompt project implementation upon resumption."

Another official who received a "warning" said that they had no choice but to execute the project budget based on Article 25 of the "Operational Guidelines for Industrial and Energy Cooperation Development Support Projects." According to these guidelines, "signing the memorandum of understanding first, then starting the project" is the basic rule. However, there is a proviso: "In cases deemed necessary for the prompt implementation of the project," project preparations may proceed before signing the memorandum of understanding. According to this clause, the official explained that the budget execution was "an active measure as the responsible agency."

However, it has been pointed out that in ODA projects conducted as part of foreign policy, it is problematic for individual ministries to simply proceed with projects based on the principle of "active administration." The Board of Audit and Inspection pointed out regarding these guidelines that "it is necessary to establish measures to clearly define exceptional reasons and their scope for proceeding with projects such as equipment purchases before signing the memorandum of understanding, to prevent cases where pre-purchased equipment is left unused for long periods, resulting in budget waste."

■Infographic Page■

Solar Power and Firewood ? Report from Ban Laokon, Vietnam

(story.asiae.co.kr/vietnam)

What Problems Does Splitting Aid Budgets Cause?

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This project was supported by the Press Promotion Fund, funded by government advertising fees.

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