The facility will be built and operated in the Gwangmyeong General Industrial Complex in Ocheon-eup, Nam-gu, Pohang, with a power capacity of 40 megawatts and an IT load capacity of 32 megawatts. It will lease space to AI companies and provide ancillary services including power supply and climate control. The project gained momentum after being selected for investment by Korea Growth Investment Corporation in July, followed by a project financing agreement in September. As of the end of September, construction was 7.66% complete, putting the project on schedule.
The total project cost of 600 billion won comprises 150 billion won in equity and 450 billion won in loans. Gyeongbuk Province is required to invest 4 billion won in the special purpose company established for the project, with the investment deadline set for the end of March 2024 under the shareholder agreement, loan agreement and fund investment guidelines. The project targets completion in November 2024, followed by a two-month trial operation, with full operations expected to commence in January 2028. The government has emphasized the need to secure the SPC investment budget from Gyeongbuk Province promptly to align with the operational timeline.
To facilitate the timeline, the project will follow an exemption track. After approval from the Economic Ministers' meeting, the Ministry of the Interior and Safety will determine and notify whether to exempt the project from further review, an approach aimed at reducing preliminary procedures for local government investment and accelerating implementation.
The government anticipates the project will generate a production inducement effect of 1.2 trillion won and create approximately 4,000 jobs, contributing to the revitalization of the local economy. By leveraging the region's abundant power infrastructure, the plan is to develop the East Coast of Gyeongbuk into a hub for the AI industry and stimulate growth in related sectors. The timely establishment of essential AI infrastructure is expected to facilitate the AI transformation of local industries and attract advanced companies, while also alleviating the concentration of data centers in the metropolitan area.
The local revitalization investment fund was introduced in 2024 to attract private capital for regional projects, using a government-established master fund as a catalyst to draw in private investment and support large-scale regional development through project financing. To date, nine projects have been selected, with an estimated total project cost of approximately 3.6 trillion won.