South Korea’s state-run Korea Electric Power Corp. (KEPCO) and Korea Gas Corp. (KOGAS) spent around 1.5 trillion won (US$1.09 billion) on paying off interest charges on loans in the first quarter, data showed Sunday.

KEPCO and KOGAS spent 1.15 trillion won and 410 billion won, respectively, in interest expenses during the January-March period, according to their financial statements. This translates to paying 16.7 billion won in interest every day.

As of the end of last year, debts of KEPCO and KOGAS amounted to 202.5 trillion won and 47.4 trillion won, respectively.

The financial burden came as KEPCO and KOGAS have been supplying electricity and gas below margin since 2022 amid growing volatility in the wake of the war between Russia and Ukraine.

Experts say the two companies may spend up to 5 trillion won in interest payments this year should the trend continue.

The two companies have implemented self-rescue measures, including selling property assets, having executives return a portion of their salari
es, and offering voluntary retirement programs. However, the measures have had only a limited impact on reducing their debts.

Last week, KOGAS President Choi Yeon-hye highlighted the need to increase utility bills ahead of the winter, noting the current rates only compensate around 80 percent of the purchase prices.

Kim Dong-cheol, president of KEPCO, also said earlier this month that a price hike is “absolutely necessary,” adding that without such adjustments, the company will face challenges in securing funds to maintain its infrastructure.

Source: Yonhap News Agency