Korea's $120bn US reactor plan sits behind an annual cap and a statutory viability test

President Trump named the first energy projects on 1 October. According to the Korea Herald and the Korea Times, South Korea's $350bn investment pledge will fund a gas-fired power plant in Texas, eight large-scale nuclear plants and a liquefied natural gas pipeline and export terminal in Alaska. Nikkei Asia put the nuclear component at $120bn and reported Seoul's position that it will "only invest in commercially viable projects". That caveat is not diplomatic softening. It is a condition in the bilateral memorandum and, since March, a requirement in Korean law — which is why the largest project announced was also the least committed.

What was announced

The projects were presented under code names. Project Star is a 6-gigawatt combined-cycle gas plant at Encinal, in La Salle County, Texas, costing $22.3bn, with commercial operation beginning in 2029 and full capacity in 2032. The Korea Herald reported its purpose as supplying AI data centres; it is the only item with both a cost and a timetable.

Project Power is the nuclear plan: eight plants, $120bn in total, of which $100bn is construction cost and $20bn contingency reserve, combining two units of Korea's APR1400 design with six of the American AP1000. Commerce Secretary Howard Lutnick named Ohio, Tennessee, South Carolina and Kentucky as locations. Individual projects, the Korea Herald reported, are to be announced as details are finalised: sites and schedules are not yet fixed.

Project North is Alaska LNG: more than $50bn, a 1,298-kilometre pipeline from the North Slope to southern Alaska with capacity of nearly 4 billion cubic feet a day. Here the Korea Herald and Korea Times both record that the commitment is subject to "commercial reasonableness" under the Strategic Investment memorandum and to applicable legal requirements — an intention to begin work, not a financing decision.

The terms behind the numbers

The structure was set a year earlier. Korea.net, the government's own channel, describes the October 2025 understanding as $200bn of strategic investment plus $150bn for shipbuilding under the "Make American Shipbuilding Great Again" heading, with "an annual investment cap of USD 20 billion depending on the progress of projects". The deal requires "commercially feasible projects that guarantee repayment of the principal and interest", with profits shared equally between the two states until both are recovered. In exchange, tariffs on cars and auto parts fell from 25 to 15 per cent, reciprocal tariffs were cut to 15 per cent, and semiconductors were to be aligned with Taiwan's treatment.

That ceiling is the figure against which the announcements have to be read. Nothing published shortens the horizon over which the money would be drawn, and no source reviewed gives an annual disbursement profile for any of the three projects.

The law Seoul wrote around the deal

The second constraint is domestic. The National Assembly passed the Special Act on Investment in the United States on 12 March 2026 by 226 votes to eight with eight abstentions, according to Korea.net and the Korea Times. It created the Korea-U.S. Strategic Investment Corp., capitalised at KRW 2tn — about $1.36bn on the Korea Times's conversion — from government contributions, entrusted assets and strategic investment bonds, to oversee the projects. The Korea Times reported that the act requires investment decisions to meet commercial rationality standards and obliges the government to return to the Assembly for approval where that standard is not met.

Seoul therefore has a statutory basis for declining individual projects, and President Lee Jae Myung has invoked it: the Korea Herald and Korea Times record his position that Alaska LNG participation depends on financial viability and legal compliance, and that nuclear investments are to be assessed plant by plant. The legislature, not the executive alone, now sits in the approval path.

Why the sequence is fragile

Tariff relief was granted against legislative progress rather than money spent, and it has already been reopened once. The Korea Herald reported that Washington confirmed the 15 per cent auto rate retroactive to 1 November 2025 after Seoul submitted its investment legislation to parliament on 26 November, Lutnick citing Korea's "implementation of its strategic-investment legislation in parliament". Two months later, the Korea Times reported, Trump threatened in late January 2026 to restore the 25 per cent rate on the grounds that Seoul had not completed the required legislative procedures. The act passed six weeks after that.

Announcements, not disbursements, have so far been the currency. That worked while the deliverable was a bill. It is harder to repeat for eight reactors whose sites are unnamed and a pipeline whose commercial case is still being tested, because both carry conditions that Korean law now requires someone in Seoul to certify.

There is also a shift in what Korean industry is being asked to do. The Export-Import Bank of Korea, cited by the Korea Times, put defence exports at $9.5bn in 2024 and $15.4bn in 2025, with more than $27bn forecast for 2026 — a business built on selling finished systems abroad. The energy package asks the reactor and shipbuilding complexes to deploy capital inside the United States instead, under a profit split that returns principal before Korea takes the larger share.

What to watch

• Whether any of the eight reactors receives a named site, an owner and a financing close, as distinct from a state.
• Whether the Alaska LNG "commercial reasonableness" review concludes, and on what pricing terms Korea's priority access would rest.
• Whether annual drawdowns are published against the $20bn cap, which would show how much of the $350bn is real.
• Whether any project is referred back to the National Assembly under the commercial-rationality clause of the March act.

The package should be read as a schedule of options, not a balance sheet. Its headline sums are the ceiling of what Korea might spend; the cap and the statute describe what it is actually obliged to.

Sources

• Korea Herald — Trump unveils S. Korea's investment plans for Alaska LNG project, Texas power plant, 8 nuclear reactors
• Korea Times — Trump announces Alaska LNG project as part of Korea's investment plans
• Nikkei Asia — South Korea to build 8 nuclear power plants in US, invest $120bn
• Korea.net — Tariff deal with US includes annual investment cap of USD 20B
• Korea.net — Nat'l Assembly passes special bill on USD 350B investment in US
• Korea Times — National Assembly passes bill on $350 bil. investment in US
• Korea Herald — US confirms retroactive cut of Korean auto tariffs to 15%
• [Korea Times — [WEEKENDER] K-defense exports enter new phase](https://www.koreatimes.co.kr/business/companies/20260919/weekender-k-defense-exports-enter-new-phase)