GS Engineering & Construction (GS E&C) is hastening its movement towards an energy transition and a developer-driven business model as it aims for new growth avenues in renewable energy outside of conventional construction.
The firm announced that it has entered into a memorandum of understanding (MOU) with worldwide infrastructure investor I Squared Capital to create a joint venture focused on developing renewable energy initiatives in Korea, such as solar energy and battery energy storage systems (BESS).
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I Squared Capital, established in 2012, is a worldwide infrastructure investment company overseeing over $60 billion (90 trillion won) in assets, concentrating on power and utilities, transportation, digital infrastructure, environmental services, and social infrastructure.
The signing event was graced by GS E&C CEO Huh Yoon-hong along with executives from I Squared Capital. The collaboration represents a strategic shift for GS E&C as it transitions from an engineering, procurement, and construction contractor to a comprehensive project developer acquiring energy assets from the initial phases.
The two firms aim to create and secure as much as 1.5 gigawatts of renewable energy resources by 2035. Of this total, approximately 820 megawatts will be generated from solar energy projects. The overall investment for the pipeline is anticipated to be approximately three trillion won, funded through a combination of equity investment and project financing.
GS E&C will manage project development in Korea, which includes site acquisition, permitting, and initial structuring, as well as offering engineering skills and project management drawn from its experience in renewable energy and infrastructure initiatives.
I Squared Capital will provide its knowledge in investment structuring and funding strategies. The company has engaged in renewable energy investments throughout Asia, encompassing India, Japan, and Taiwan, and is venturing into the Korean market through the collaboration.
The two firms aim to collaboratively discover new renewable energy opportunities and evaluate the projects' technical and financial feasibility.
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GS E&C stated that the partnership aligns with its strategy to transition from a traditional engineering, procurement, and construction contractor to a renewable energy developer that owns and manages energy assets, thereby enhancing its role in the global shift towards energy transition and carbon neutrality.
GS E&C has recently intensified its efforts in renewable energy. In January, it took part as a developer in a solar initiative in Maharashtra, India, finishing the 12.75 megawatt Patur Solar Power Plant, which provides electricity to industrial customers, including local Korean companies.
In April, Huh participated in an MOU signing event with India's Arie Energy and Suzlon Energy, concentrating on the repowering of wind farms and hybrid renewable systems that integrate solar, wind, and BESS.
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Within the country, the firm is broadening its renewable energy portfolio with initiatives such as a 13 megawatt solar power facility in Taean, South Chungcheong Province that provides electricity to LG Uplus, a 60 megawatt solar plant in the same region, and a 35 megawatt rooftop solar initiative.