North Gyeongsang Province to secure 4 billion won in capital contribution by March next year

Total project cost of 600 billion won; operations set to begin in January 2028

Expected to generate 1.2 trillion won in production and 4,000 jobs

The government plans to streamline the local fiscal investment review process to accelerate construction of a dedicated AI data center in Pohang worth 600 billion won ($453 million). The plan calls for expediting administrative procedures so North Gyeongsang Province can secure the required capital contribution on time, ensuring the data center begins operations as scheduled.

The Pohang dedicated AI data center project [Ministry of Planning and Budget]
The Pohang dedicated AI data center project [Ministry of Planning and Budget]

The government announced the plan Wednesday at a joint session of the Economic Ministers' Meeting and the Science and Technology Ministers' Meeting held at Government Complex Seoul, presenting a package of measures titled "Rapid Advancement Plan for Regional Revitalization Investment Fund Project No. 9."

Introduced in 2024, the Regional Revitalization Investment Fund uses a government-seeded mother fund as seed capital to attract private investment into large-scale regional projects, with the structure designed to expand investment to more than 10 times the size of the mother fund. Nine projects have been selected under the fund to date, including the Pohang AI data center, with a combined projected total project cost of around 3.6 trillion won.

The rapid advancement measures focus on helping North Gyeongsang Province secure its capital contribution budget ahead of schedule. The province is required to contribute 4 billion won to the special purpose company established to carry out the project by the end of March 2027 — a deadline set under the shareholder agreement, loan commitment and the Regional Revitalization Investment Fund's investment guidelines.

The government plans to process the local fiscal investment review swiftly by applying an exemption track to the project. Under the exemption track, the Ministry of Interior and Safety decides and notifies the exemption from consultation after a resolution by the Economic Ministers' Meeting and a review by a specialized institution.

The Pohang dedicated AI data center will be built in the Gwangmyeong General Industrial Complex in Ocheon-eup, Nam-gu, Pohang, North Gyeongsang Province. The facility will have a power receiving capacity of 40 megawatts and an IT load capacity of 32 megawatts, and will lease data center space to AI operators while providing ancillary services including power supply and temperature and humidity control.

Of the total project cost of 600 billion won, 150 billion won will come from equity and 450 billion won from loans. Korea Growth Investment Corp., the mother fund manager of the Regional Revitalization Investment Fund, selected the project as an investment target in July after a comprehensive review of the project's content, capital structure and licensing status. A project financing loan agreement was subsequently signed in September.

Construction was proceeding normally as of the end of September, with a completion rate of 7.66 percent. Project financing loans from financial institutions will be drawn down in line with construction progress. The facility is scheduled to be completed in November 2027, undergo two months of trial operations, and begin full operations in January 2028. The project is expected to generate 1.2 trillion won in production inducement effects and create approximately 4,000 jobs.

The government expects the project to contribute to establishing an AI industry hub along the North Gyeongsang eastern coast, nurturing related industries and laying the groundwork for attracting advanced companies to the region. It also anticipates the project will help accelerate the AI transformation of local industries and ease the concentration of data centers in the Greater Seoul area.


y2k@heraldcorp.com