South Korean state utility KEPCO could find it difficult to follow through on its plan to sell off its coal and gas assets abroad to fund the clean energy transition at home as it tries to fill a $12bn operating loss hole in its balance sheet.

The company, which dominates the domestic market and is a key investor in emerging markets across Asia, posted a loss of $6bn in Q1 2022, which has since grown to $12bn for H1 2022.

However, it could find it difficult to find buyers and fetch good prices for assets that are effectively stranded, calling into question KEPCO’s ability to decarbonise, the Institute for Energy Economics and Financial Analysis (IEEFA) said in a recent report.

“KEPCO’s main responsibility is to ensure a cost-efficient and effective power supply in keeping with the government’s strict tariff environment,” said the IEEFA’s Christina Ng.

“However, a series of short-sighted missteps have weighed on profitability and business viability, therefore exposing KEPCO’s poor aptitude for business and corporate governance.”

KEPCO has been issuing green bonds since 2018/2019, of which the proceeds are required to be allocated to green projects, which include renewable energy.

©2022 bne IntelliNews , source Magazine