No progress in concrete investment agreement after letter of intent for investment of 20 trillion won
Korea-Blackrock TF official meetings held ‘0’ in one year
(Seoul = Yonhap News) Reporter Hayoung Kwon = The large-scale investment announced by the government to turn Korea into the 'AI capital' of Asia-Pacific in collaboration with BlackRock, the world's largest asset management company, has remained in the first stage for a year.
Although Vina Energy, a Blackrock affiliate, announced its intention to invest approximately 20 trillion won in artificial intelligence (AI) data centers and renewable energy businesses, it was found that no progress has been made in follow-up procedures such as specific investment agreements, corporation establishment, financing, licensing, and construction commencement after the non-legally binding Letter of Intent for Investment (LOI).
It was confirmed that the working-level task force (TF) with BlackRock, which the government announced it would form to materialize the investment, had not held a single official meeting over the past year.
◇ Although there was an intention to invest 20 trillion won... 1st year LOI phase
According to the government and related industries on the 23rd, the Ministry of Science and ICT has not signed a specific investment agreement until about a year after the AI industry global cooperation memorandum of understanding (MOU) signed with Blackrock in September of last year.
The MOU between the Ministry of Science and ICT and Blackrock was signed in New York, USA during the United Nations General Assembly on September 22 last year (local time). The MOU includes cooperation on domestic AI and renewable energy infrastructure, establishment of a hyperscale (ultra-large) AI data center based on renewable energy in Korea, and large-scale joint investment for AI transformation in the Asia-Pacific region over the next five years.
At the time, BlackRock CEO Larry Fink said, "We will actively cooperate by linking global capital so that Korea can become the 'AI capital' of the Asian region," and the government also explained, "Pilot investments worth at least trillions of won will occur in the near future," and "A task force between the Korean government and BlackRock will be formed immediately."
Afterwards, Vuna Group, which was connected to Global Infrastructure Partners (GIP), which was acquired by Blackrock, participated in the promotion of specific investment projects.
BlackRock acquired GIP, a global infrastructure investment company, in 2024, and Vina Group is conducting renewable energy business in the Asia-Pacific region.
On October 23 last year, immediately after signing the MOU, Vina Group held a letter of intent (LOI) delivery ceremony with the Ministry of Climate, Energy and Environment and the Ministry of Science and ICT and expressed its intention to invest in a project with a total project cost of approximately 20 trillion won, including domestic renewable energy and the construction of an AI data center.
However, unlike an investment contract, an LOI is not a definitive investment agreement premised on legal binding. Since then, with regard to the AI data center business, it has not yet been confirmed that full-fledged business promotion stages have been entered, such as specific investment agreements, establishment of a corporation, financing, licensing, and commencement of construction.
There has been some follow-up movement in the renewable energy sector. In July of this year, Korea Western Power, including Vina Energy, and Copenhagen Infrastructure Partners (CIP) signed an agreement to jointly develop a 500 megawatt (MW) Taean offshore wind power complex.
It was also confirmed that an official meeting was not held in the TF between the government and Blackrock, contrary to initial notice.
According to data submitted by the office of People Power Party lawmaker Kim Jang-gyeom, a member of the National Assembly's Science, Technology, Information, Broadcasting and Communications Committee, from the Ministry of Science and ICT, the Ministry of Science and ICT responded that it is in regular working-level communication with Blackrock and Vina Group, but that "no official meetings have been held."
◇ There has been no official meeting of the Korea-Blackrock TF yet… Negotiation of investment conditions is key
The industry believes that in order to lead to actual investment in the future, it will be necessary to review various conditions such as power supply, licensing, and business feasibility required to build a data center.
In particular, large-scale AI data centers involve several procedures such as securing land, supplying power, financing, and obtaining various permits, so it is analyzed that considerable consultation may be needed before LOI leads to actual investment and construction.
An official in the domestic AI infrastructure industry said, “From the perspective of an investment business, there are many things to consider, such as tax support, electricity costs including electricity bills, and various permits.”
He said, “It is much more difficult to turn this into a specific project than signing an MOU itself,” and added, “There are cases where relationships between companies do not lead to actual investment, and for large-scale infrastructure projects involving the government, the conditions to be reviewed may be more complicated.”
An official from the Ministry of Science and ICT said, "We are continuing communication with Blackrock, including Vina Energy's Korean subsidiary," but declined to comment on specific progress.
