North Korea seeking €43 million in foreign investment for electricity sector | NK News - North Korea News

North Korea seeking €43 million in foreign investment for electricity sector | NK News - North Korea News




North Korea seeking €43 million in foreign investment for electricity sector
Projects across the domestic economy reported to be seeking foreign funds


Oliver Hotham
January 29th, 2019

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A North Korean organization is seeking €43 million (USD$49.1 million) in investment to renovate and modernize its “electric power sector,” an investment proposal posted on a DPRK-run website recently revealed.

The proposal, uploaded by the North’s Ministry of External Economic Relations, asks for technical assistance in the “replacement of distribution lines, updating operational voltage of distribution system and transformers” as well as the “installation of extra electrostatic capacitor system of various voltages.”

Investors will work with the Korea Foreign Investment and Economic Cooperation Committee “to update present existing steel distribution lines and improve operational voltage class,” it adds.

It also seeks help in “reduc[ing] the transmission loss of electricity by installing extra electrostatic capacitor of various voltage classes.”

Little information is given about the structure of the investment, and whether partners will be offered equity as part of a joint venture – currently prohibited under UN Security Council Resolution 2375.

North Korea’s power and electricity problems are well-documented: frequent blackouts remain commonplace, even in Pyongyang, though the situation is reported to have improved in recent years.

DPRK leader Kim Jong Un made reference to the issue in his New Year’s Speech earlier in the month, promising that the state would take steps towards “relieving the shortage of electricity” and committing to “radically increase the production of electricity” in 2019.

“We should take the problem of easing the strain on electricity as an undertaking of the whole state,” Kim said, saying the country would step up work on the ongoing construction the Orangchon and Tanchon power stations and explore the possibility of investment in wind and atomic energy.

South Korea has also expressed an interest in assisting the North with upgrading its power infrastructure as relations between the two Koreas have warmed.

The country’s Ministry of Unification (MOU) last August announced it was planning research projects investigating possible bilateral and multilateral cooperation with North Korea in electricity production.

The electricity proposal was among five recently uploaded by the Ministry of External Economic Relations, which is responsible for the country’s foreign trade.

Among them was another energy sector-focused bid, asking for €300,000 to join a joint venture working to renovate and modernize the Hyesan Oval Briquette Factory.

Others focus on the domestic consumer goods – also a focus of the New Year’s Speech – with one proposal asking for €1.24 million in investments to renovate and modernize the Chongjin Fishing Net Factory.


The proposals are among several recently posted online by DPRK authorities | Photo: Ministry of External Economic Relations website | Click to enlarge

The plans, which would see investors be part of a joint venture, would see the factory develop “advanced canned-fish-producing technology and… up-to-date equipment.”

The upgrades, the plans notably added, are intended to equip the factory with the ability to meet “domestic and international demands.”

North Korea, however, is currently banned from exporting seafood under UNSC Resolution 2371.

One expert said the proposals are noteworthy “in what they can tell us about government investment priorities.”

“First, the electricity sector is, as the New Years Address confirmed, an area of particular import right now for the government,” Peter Ward, a writer and researcher on the North Korean economy, told NK News.

“Second, the priority appears to be less raising export volumes than improving capacity to meet domestic demand.”

The proposals are among several published by DPRK entities in recent months, possibly in anticipation of a future relaxation of international sanctions as relations with the U.S. improve.

A recent set of proposals uploaded on the same Ministry of External Economic Relations-run website in December sought over €6.8 million (USD$7.7 million) in foreign direct investment in a range of projects across the domestic economy.

Another, uploaded just a week earlier, saw the Korean International Exhibition Corporation (KIEC) say it was seeking international investment for plans to construct a new exhibition center and a 30-story hotel in Pyongyang.

Edited by Colin Zwirko


Featured Image: CPC_7641 by nknews_hq on 2016-10-04 19:57:17