Seoul, September 22 — South Korea has picked a natural gas-fired power plant in Texas as the first concrete project under the energy component of the US$350 billion investment package it agreed with the United States in 2025, the Ministry of Trade, Industry and Energy said. The plant, to be built and operated by a South Korean consortium, will have a capacity of approximately 1.2 gigawatts and will feed power into the ERCOT grid, which covers most of Texas.
The ministry put the total investment at about US$3 billion, with construction slated to begin in 2026 and completion targeted for 2029.
What Seoul gets, and what it pays
The project traces back to the US–South Korea summit in Washington in July 2025, where the two sides outlined the US$350 billion package — US$150 billion for shipbuilding and US$200 billion for strategic industries including semiconductors, batteries and energy. In return, the United States agreed to a 15% tariff on South Korean goods, down from the 25% threatened earlier in 2025. For India and the wider Asian export economy, the template matters more than the megawatts.
Seoul is converting a tariff threat into directed investment, and the same playbook is being watched closely by capitals across the region that run large surpluses with Washington. South Korea’s trade surplus with the United States hit a record US$44 billion in 2024.
The ministry said the Texas project will help balance a bilateral trade relationship skewed by that surplus, by encouraging South Korean companies to manufacture and invest on American soil.
Who is building it
Major South Korean firms are expected to take part, among them Korea Electric Power Corporation (KEPCO), Samsung C&T and SK E&S, though the ministry did not disclose the full consortium or the exact location, citing ongoing negotiations. The plant will be owned and operated by a joint venture with South Korean companies holding a majority stake, and the electricity generated will be sold under long-term power purchase agreements. KEPCO has built and operated plants in the United Arab Emirates and Saudi Arabia.
The Texas project would be its first major power plant investment in the United States. The plant will use combined-cycle gas turbine technology and is designed to be hydrogen-ready, meaning it can be retrofitted to burn hydrogen as a fuel source later.
South Korean officials said it will use advanced emissions control technology and will adhere to US labour and environmental standards. It will still need permits from the Texas Commission on Environmental Quality and the US Environmental Protection Agency, and environmental groups are expected to scrutinise emissions from the gas-fired facility. Officials said the plant will help meet rising electricity demand in Texas, driven by data centres, cryptocurrency mining and population growth.
The US Department of Energy has welcomed the investment, citing grid reliability and job creation, while the US Embassy in Seoul called it a strong signal of the alliance’s economic dimension. The US Chamber of Commerce also welcomed the announcement, pointing to the role of foreign direct investment in job creation.
About 1,000 construction jobs and 100 permanent positions are expected to be created. The Texas Public Utility Commission will oversee the plant’s integration into the ERCOT grid.
How it gets paid for
Financing is expected to combine equity from the South Korean companies with loans from US and international banks. South Korea’s Export-Import Bank and the Korea Trade Insurance Corporation are expected to contribute, and the US Export-Import Bank may also provide support. The US International Development Finance Corporation may back the project, though no final agreement has been announced, and the World Bank’s Multilateral Investment Guarantee Agency is expected to insure it.
The agreement also includes provisions for South Korean companies to access US government incentives for clean energy and infrastructure. The final investment decision is expected in early 2026, with the project to be signed officially around the same time and built in phases, the first coming online in 2029.
South Korea is a major investor in the United States, with cumulative foreign direct investment exceeding US$100 billion as of 2024. The Texas plant is the largest single investment under the energy component of the package so far, and follows a US$4.4 billion battery plant in Georgia and a US$1.7 billion semiconductor facility in Arizona. Both sides aim to finalise implementation details of the package by the end of 2025.
The project is expected to feature at the US–South Korea Joint Committee meeting in November 2025 and at the APEC summit in 2026. South Korean President Lee Jae-myung and US President Donald Trump have both touted the deal as a win for their economies.
Watch for the remaining consortium names and the site disclosure, the final investment decision in early 2026, and whether the hydrogen and nuclear projects Seoul says are under discussion follow the Texas plant onto the table.
