On September 22, the governments of Korea and the United States announced plans to advance three Korea-U.S. strategic investment projects under the Memorandum of Understanding (MOU) on Korea-U.S. Strategic Investment: the Texas gas-fired combined-cycle power generation project (“Project Star”), the Korea-U.S. Nuclear Power Framework (“Project Power”), and the Alaska LNG Project (“Project North”).

The announcement follows up on the Korea-U.S. trade agreement reached in July 2025 and the Strategic Investment MOU signed in November of the same year, following the relevant procedures under the MOU and the Korea-U.S. Strategic Investment Special Act. The plans are expected to contribute to building stable supply chains by expanding bilateral cooperation in strategic industries, including energy, while further strengthening economic security cooperation between Korea and the  U.S.

[Project Star: Texas Gas-Fired Combined-Cycle Power Generation Project]

The two countries will pursue Project Star, the first Korea-U.S. strategic investment project, to construct and operate a gas-fired combined-cycle power plant in Encinal, Texas, with a total project cost of USD 22.3 billion and a capacity of 6,472 MW to supply power to AI data centers. The plant will directly supply electricity to nearby data centers, with the first phase scheduled to begin commercial operations in 2029 and full operation targeted for 2032.

The project brings together leading global companies. It will be led by Related Companies, the world’s ninth-largest real estate developer, and NextEra Energy, the largest power generation operator in the U.S., while Lewis Energy Group, the fifth-largest natural gas supplier in Texas, plans to provide the site and related infrastructure, including natural gas and water.

The government assessed the project as commercially reasonable after taking into account a range of factors, including the participation of reliable business partners with proven capabilities and experience, rapidly growing electricity demand driven by expanding data center investment in Texas, and projected electricity prices at appropriate levels. Based on this assessment, it completed the domestic procedures required by law, including deliberation and resolution by the Project Management Committee and the Steering Committee, as well as reporting to the National Assembly. With this announcement, the project will officially move forward as the first Korea-U.S. strategic investment project.

The two countries have paved the way for greater participation by competitive Korean companies across the entire project cycle, including power generation equipment, engineering and construction, and long-term operation and maintenance. This is expected to facilitate Korean companies’ expansion into the U.S. AI and energy infrastructure markets. In addition, the U.S. side has expressed its intention to provide opportunities for Korean-made equipment, including turbines, to be supplied to other similar projects in the U.S., potentially opening up further opportunities for Korean companies in the U.S. market.

Furthermore, through Project Star, the two countries are expected to jointly address the large-scale electricity demand in the U.S. arising from the expansion of AI data centers, thereby creating a new model for economic security cooperation in strategic areas such as AI and energy infrastructure.

[Project Power: Korea-U.S. Nuclear Power Framework]

The two countries have agreed on the Korea-U.S. Nuclear Power Framework, which provides for the construction of eight large-scale nuclear power units in the U.S. – two APR1400 units and six AP1000 units – using up to USD 120 billion from the Korea-U.S. Strategic Investment Fund, and sets out the direction for nuclear power cooperation between Korean and U.S. companies. The framework is expected to be signed by the governments of Korea and the U.S., Westinghouse, Korea Electric Power Corporation (KEPCO), and Korea Hydro & Nuclear Power (KHNP).

Through the framework, Korea has achieved a significant milestone, with its APR1400 set to become the first foreign reactor model to be built in the U.S., a global leader in nuclear power. Initially, the APR1400 was unable to enter the U.S. market due to the Settlement Agreement (SA) signed between Korean and U.S. companies. The Korean government, however, engaged in extensive outreach to the U.S. Department of Energy, state governments, Congress, and industry stakeholders, while conducting intensive negotiations with the U.S. side, ultimately paving the way for the APR1400’s entry into the U.S. market. The deployment of two APR1400 units in the U.S. is also expected to enhance confidence in the Korean reactor model in third-country markets and improve its prospects for securing future contracts.

Korean construction and equipment companies will also participate in the construction of Westinghouse’s AP1000 reactors. Nearly 50 years after Korea’s first nuclear power plant, Kori Nuclear Power Plant, was built in 1978 using Westinghouse technology, Korean companies will now partner with Westinghouse to build nuclear power plants in the U.S. If Korean companies successfully lead the construction of the AP1000 units, this is expected to create favorable conditions for joint expansion into third-country markets, including Europe, while also increasing Korean companies’ participation in the AP1000 supply chain.

Up to USD 120 billion will be available to finance the construction of the eight nuclear power units. This amount consists of approximately USD 100 billion in construction costs (overnight costs) and USD 20 billion in contingency funds.

Given the nature of nuclear power projects, where major equipment requires a long lead time from ordering to manufacturing, the two countries also discussed making an upfront payment of up to USD 10 billion by the end of this year to secure long-lead items[1] in advance, subject to a review of commercial reasonableness, reporting to the National Assembly, and fulfillment of other requirements under applicable domestic law. This is expected to facilitate the timely implementation of the projects while creating greater opportunities to utilize Korean-made equipment.

In addition to nuclear power plant construction in the U.S., the two governments and companies plan to pursue the acquisition of equity stakes in Westinghouse by Korean companies, with a view to sharing between Korea and the U.S. the commercial benefits generated by AP1000 projects. Specific investment terms and other details concerning the equity acquisition will be determined through future negotiations between the companies.

However, as the Nuclear Power Framework establishes the broad direction for Korea-U.S. cooperation in nuclear power, no specific projects have yet been finalized. Based on the framework, the two countries will further develop individual projects, including their sites, project structures, and construction schedules, and determine whether to proceed with each project following a review of its commercial reasonableness and the completion of relevant National Assembly and other required procedures.

[Project North: Alaska LNG Project]

The Alaska LNG Project involves the construction of a large-scale gas pipeline to transport natural gas from northern Alaska to the southern part of the state, as well as an LNG terminal for exports. The two countries have agreed to begin reviewing the project.

The two countries will determine whether to proceed with the project if the commercial reasonableness requirements set out in the MOU on Korea-U.S. Strategic Investment and the conditions prescribed under applicable domestic law are met.

In addition, should the two countries decide to proceed with the project following the review, the U.S. side has agreed to create favorable conditions for the participation of Korean equipment manufacturers and suppliers. In this regard, the U.S. side will provide tariff reductions for steel and other equipment and materials required for the project, while ensuring long-term LNG offtake agreements on commercially viable terms and granting Korea preferential access to Alaska LNG produced through the project.

If successfully implemented, the project is anticipated to contribute to strengthening Korea’s energy security by diversifying its LNG supply sources.

Please refer to the attache files.