The government is set to invest in a dedicated artificial intelligence (AI) data center in Pohang and a battery energy storage system (BESS) in Yeonggwang through its Regional Revitalization Investment Fund. This initiative aims to enhance digital and power infrastructure, fostering advanced industries led by local governments with private sector participation.
According to the Ministry of Economy and Finance on August 6, the 'Pohang AI Data Center' and 'Yeonggwang Battery Energy Storage System' have been selected as the 9th and 10th projects under the Regional Revitalization Investment Fund.
The fund operates by allowing local governments and the private sector to identify projects that meet regional needs, with a government-established master fund providing initial capital.
The Pohang AI Data Center will involve a total investment of 600 billion won to build a GPU-based AI data center with a power capacity of 40 megawatts in the Gyeongbuk Pohang Gwangmyeong General Industrial Complex. This high-performance data center, specialized for AI computations, is expected to break ground in the second half of 2026 and begin operations in the first half of 2028. Upon completion, the project is anticipated to create approximately 4,300 jobs during the construction phase and generate an economic impact of 1.2 trillion won.
The Yeonggwang Battery Energy Storage System project will require a total investment of 179.8 billion won. This project aims to establish a BESS in Jeonnam Yeonggwang with a maximum discharge capacity of 80 megawatts and a storage capacity of 480 megawatt-hours. It will store surplus renewable energy and supply it during peak demand periods. The project is based on a 15-year long-term contract with the Korea Power Exchange and began construction in the first half of this year. The government expects to start operations in early 2024, enhancing the stability of the power grid in the Honam region and increasing the utilization of renewable energy.
The Regional Revitalization Investment Fund is structured around a master fund contributed by government finances, funds for responding to local extinction, and the Korea Development Bank, allowing local governments and the private sector to establish their own funds and special purpose companies (SPCs) to advance projects. The government aims to attract private investments at least ten times the amount of the master fund and offers various incentives, including expedited financial investment reviews and special guarantees from the Housing and Urban Guarantee Corporation (HUG).
The government has announced plans to establish a master fund of 800 billion won after 2024, with a total of 10 projects and 4.4 trillion won in regional revitalization initiatives selected to date. It also plans to expand consulting for local governments and match them with investment institutions to continue identifying region-led investment projects.
* This article has been translated by AI.
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