South Korea Selects Texas Power Plant for US Investment

The South Korean government has selected a $22.3 billion natural gas-fired combined-cycle power plant in Encinal, Texas, as the first project under a $200 billion strategic investment commitment to the United States. Industry Minister Kim Jung-kwan briefed the National Assembly's trade committee on the project, which will provide 6.3 gigawatts of capacity to support AI data centers and semiconductor facilities. The plant will be funded entirely by South Korea, with ownership split equally between Seoul and Washington.

This project is part of a larger $350 billion investment package linked to a trade agreement reached on July 30, 2025, which lowered U.S. tariffs on South Korean goods from 25% to 15%. While $150 billion of the total is earmarked for shipbuilding, the remaining $200 billion is for strategic investments. Lee Jae Myung, President of South Korea, noted that commercial viability, including profit-sharing and loss responsibility, has become the primary focus as negotiations shift toward individual projects.

Additional planned investments include a liquefied natural gas project in Alaska and the construction of up to eight nuclear reactors. For the nuclear project, South Korea is negotiating a 5% to 10% equity stake in a U.S. nuclear company. Final approval for these projects rests with U.S. President Donald Trump, who previously threatened higher tariffs if the agreement's implementation stalled. Opposition lawmakers in South Korea have raised concerns regarding the potential financial risks of these commitments.