Investigation shows $446 mn worth of misuse in Korea’s energy project aid

[Photo by Kim Ho-young]

A recent investigation by the Yoon Suk Yeol government into energy projects carried out under the previous government showed that a total of 582.4 billion won ($446.4 million) worth of funds have been misused.

The Joint Government Corruption Prevention Office announced Monday that it has exposed 5,359 cases worth 582.4 billion won of illegal and improper execution of government aid provided through the power industry infrastructure fund.

The investigation is the second of its kind after the first in September last year. It targeted state-run entities including Korea Electric Power Corp. and Korea Energy Agency.

By sector, the investigation showed that the renewable energy project sector had 3,010 cases of illegal activity, worth 489.8 billion won.

The investigation team decided to request the recovery of 40.4 billion won of the discovered amount and hold investigations into 626 cases. It also decided to take disciplinary action against individuals involved in 85 cases.

“Solar power projects should be expanded in order to address future climate change,” said an unnamed official from the investigation team. “We will continue to make efforts to eliminate illegal and improper practices and create a sound environment for development projects.”

Regarding subsidies in the area of power plants, an inspection was conducted on the execution by 25 local governments between 2017 and 2021. The inspection showed that a total of 1,791 cases of improper practices amounting to 57.4 billion won were discovered.

Various methods were employed, such as purchasing land at cheap prices using subsidies and then selling it without approval, falsely reporting subsidy settlements, supporting specific residents or organizations, and engaging in contract splitting schemes.

In the field of power research and development (R&D), a total of 172 cases of misappropriation amounting to 26.6 billion won were discovered from 2018 to 2022. Cases of budget waste, such as double funding for R&D projects, failure to settle project costs, and abandonment of equipment and results, were detected.

Furthermore, violations of prohibited regulations were discovered in other power fund activities, such as cases of signing contracts with organizations of retired KEPCO employees.

To prevent improper funding, the government plans to require project applications after detailed construction costs have been determined.

Additionally, to strengthen the self-review of power-related R&D projects, clear guidelines for the management tasks of the KETEP, which serves as the R&D organization, will be established.

The joint investigation team explained that the expansion of renewable energy is inevitable and solar power is a crucial type of project.

They clarified that their investigation was not motivated by the necessity of the projects but rather aimed to examine how efficiently the projects were implemented.

In the first examination, a total of 2,267 cases of illegal and improper execution, amounting to 261.6 billion won, were discovered. Further investigations were requested for 376 individuals and 1,265 cases.