South Korea is reportedly nearing finalization of its first major investment projects in the United States, stemming from a $350 billion pledge made in October 2025 to resolve tariff negotiations. The immediate focus is on a $200 billion strategic investment package, with the South Korean government planning to announce specific projects on September 18th and disburse an initial sum of at least $2.2 billion by the end of September. This move comes after the U.S. reportedly expressed concerns over delays in South Korea's pledged investments and pressed for swift action.
Minister of Trade, Industry and Energy Kim Jeongkwan is in the U.S. to finalize details, with the leading candidate for the first project being the construction of the Encinal gas combined-cycle power plant in Texas. This plant, with an estimated capacity of 6.3GW, is projected to cost around $22.3 billion, though earlier reports suggested the U.S. sought $25 billion while South Korea aimed for $20 billion. The Texas project is seen as crucial to meeting increased electricity demand from semiconductor plants and AI data centers in the region.
Beyond the initial gas project, South Korea is also considering a $120 billion investment in building up to eight nuclear power reactors in the U.S., potentially including Korean-designed APR1400 reactors, and a $67 billion liquefied natural gas (LNG) project in Alaska. The total cost of these three projects combined is estimated at $209.3 billion, exceeding the initial $200 billion strategic investment target. South Korean officials are currently negotiating whether to include all three projects, adjust investment amounts for each, or exclude some to stay within the agreed ceiling.
The overall $350 billion investment commitment from South Korea also includes $150 billion for the U.S. shipbuilding industry. The strategic investment portion of $200 billion is intended to be disbursed in installments of up to $20 billion per year over a 10-year period. Funding for these investments is expected to come from foreign-denominated assets held by the Bank of Korea and the Foreign Exchange Equalization Fund, supplemented by government-guaranteed bonds and international borrowing. The South Korean government plans to brief its National Assembly on the plans before the official announcement.
