The government will actively use private capital to build large-scale infrastructure such as artificial intelligence (AI) data centers and power grids. It will also open the door for the general public to participate in private investment projects and introduce a system to share profits from the projects with the public.
Acting Minister and Vice Minister Lim Ki-geun of the Ministry of Planning and Budget said on the 11th that the government convened the second Private Investment Project Deliberation Committee and reviewed and approved a plan to vitalize private investment. Through this plan, the government intends to expand the scope of private investment projects to include AI data centers and power grids to reduce the burden on national finances while responding to investment demand in emerging industries.
For AI data centers, a business model will be prepared this year, and after a feasibility study, the first private investment project will begin next year. Private capital will also be used to build power grids such as the Energy Expressway based on revisions to the special act to expand the national backbone power grid, with funding support provided through the Public Growth Fund.
Project methods will also be diversified. In addition to existing private investment facilities, the government will expand "operation-type private investment," which allows operation of fiscal facilities, and establish a new category of "simple operation-type private investment" without large-scale upgrades or expansions. The simple operation type will operate social infrastructure such as schools and cultural centers where private investment projects have ended under long-term contracts of 10 years or more to improve service quality and job stability.
Another core component of the plan is "public participation-type private investment projects." The government will introduce a "public-participation public offering infrastructure fund" that allows the general public to share private investment project revenue without bearing risk. The fund's asset will consist of senior bonds, and the Korea Infrastructure Credit Guarantee Fund will provide guarantees to ensure stability.
A "BTL-only special infrastructure fund" for expanding everyday-life facilities will also be newly established in the first quarter of this year at a scale of 100 billion won.
To boost local private investment projects, the government will introduce an incentive system. When selecting an operator for a private investment project in a depopulated area, the original proposer will receive a preferential score of 1 point. The government will also introduce a "region-restricted competitive bidding system" that allows only local companies to participate in projects below a certain size (less than 8.8 billion won for the state and less than 15 billion won for local governments).
Project conditions will also be improved. Previously, construction costs could be adjusted only if the total construction cost changed by 7% or more during the construction period, but going forward the threshold will be lowered to 5% to respond flexibly to cost fluctuations. The proportion of the competent authority's burden for increases in project costs will also be raised from 50% to 60% to ease the burden on the private sector.
Through this measure, the government expects to identify new private investment projects worth about 100 trillion won over the next five years and shorten the implementation period for private investment projects by up to 24 months. It will immediately amend the Basic Plan for Private Investment Projects and submit a bill to amend the Act on Private Participation in Infrastructure for social infrastructure within the first half of the year.