Acquisition of approval to amend construction plan for the Chungju & Daesowon Fuell Cell Power Generation Project

Lee & Ko’s Projects & Energy team successfully obtained approval to amend the construction plan for the domestic AA fuel cell power generation project (“Project”) through an appeal process made against the Ministry of Trade, Industry and Energy (“MOTIE”)’s rejection of the amendment application. The first stage of financing for the Project closed in December 2024, and the second stage of financing is scheduled for around July 2025. The Project is the largest fuel cell power generation project in Korea, with a total investment amount of approximately KRW 600 billion. The MOTIE sought to subject the Project to the Hydrogen Power Supply Obligation System (“HPS”) rather than granting an approval to amend the construction plan for the Project under the Renewable Portfolio Standard (“RPS”) system (to which it was subject) on the basis of the policy direction on limiting allocation quotas under the RPS system, an appendix to the Hydrogen Act (Act on the Promotion of Hydrogen Economy and Safety Management of Hydrogen).  

However, Lee & Ko’s Projects & Energy team worked closely with the client to develop arguments to emphasise that, among other things, the Ministry’s rejection of the construction plan amendment application was contrary to law, and that subjecting the Project to the HPS system when the first stage of financing had closed would have significant adverse effects on the shareholders, lenders and relevant contractual counterparties, and successfully obtained the approval to amend the construction plan under the RPS system. This averted potential losses amounting to several hundred billion won that was expected to be incurred if the amendment application was rejected. 

Numerous fuel cell power generation projects and renewable energy projects in the market currently face the same or similar legal issues as the Project, and as such, this matter not only has a significant impact on the renewable energy market but also raises considerable implications for future policy reforms.