North Korea requests Chinese investment for solar power plant

The agreement would give Chinese investors a 10-year lease on sea farms along the west coast.
By Hyemin Son for RFA Korean
2022.09.07
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North Korea requests Chinese investment for solar power plant
Photo: RFA

North Korea is seeking Chinese investment to build a solar power plant that would add more capacity to its tapped out electricity grid, government sources in the isolated country told RFA.

North Korea is chronically short on power and rolling blackouts are common, even for privileged people in the nation’s capital Pyongyang. 

Statistics Korea, a South Korean government agency, estimated that the North’s power generation capacity in 2018 was 24.9 billion kilowatts, one-twenty-third that of South Korea. On a per-capita basis, in 2019 only 940 kilowatt hours were available for the average North Korean, about 8.6 percent of the power output available to a typical South Korean, according to the Korea Energy Economics Institute. 

Because Pyongyang is prioritized over other cities, and cities are prioritized over provinces, most North Koreans likely have even less power available.

North Korea’s aging power plants, lack of energy resources and its inefficient transmission and distribution systems are key contributors to chronic power shortages.

To build a new solar power plant, Pyongyang needs investment from China, which it hopes to procure by trading away the rights to sea farms off of the country’s west coast, an official from the capital told RFA’s Korean Service on condition of anonymity for security reasons.

“If Chinese investors provide U.S. $2.5 billion for the construction of the plant, near the West Sea, they will be repaid with a lease on a West Sea fish farm for about 10 years,” he said, using the Korean name for the sea west of the Korean peninsula, internationally known as the Yellow Sea.

The source said that the specifics about repayment would be discussed after the agreement between the two countries is complete.

Cross-border trade between North Korea and China has been on and off again in 2022, after a two-year suspension starting in January 2020 due to the coronavirus pandemic. Should the border reopen again, North Korea would, according to the plan, hand over the fish farms to China, which would have rights to the fish, eels and shellfish raised on the farms for the next 10 years, the source said.

He said the proposal came from the Second Economic Committee, which coordinates the military defense industry. The proposal documents were faxed from Pyongyang to a Chinese go-between with connections to an investor.

The documents show that North Korea is prepared to lease 12,253 acres of fish farms in return for $2.5 billion for the plant, which would generate 2.5 million kilowatts of electricity per day. 

“The fish farms that would be leased to China are in the West Sea in an area that stretches from Sonchon, Kwaksan and Yomju counties in North Pyongan province to Chungsan county in South Pyongan province. The solar plant would be built near [the city of] Nampo,” the source said.

The proposal is part of an overarching plan by the Central Committee of the ruling Korean Workers’ Party to attract overseas investment, a North Pyongan official told RFA.

Each trade agency under the Cabinet is working to secure wheat imports from Russia and food imports from China, according to the second source, who requested anonymity to speak freely.

“The biggest of these projects is to hand over fish farms in the West Sea to China and attract investment in the construction of solar power plants," he said.

Prior to the pandemic, North Korea had already been planning to build solar plants in the western coastal region, according to the second source. Previously the plan was to transfer rare earth mineral mining rights to Chinese developers. 

RFA reported in October 2019 that authorities handed over mineral rights for a mine in Cholsan county of North Pyongan to a Chinese developer in exchange for investment in the same planned solar plant. 

Sanctions intended to prevent North Korea from developing its nuclear and missile programs, however, forbid Pyongyang to export rare earths. Investors in China therefore have not been eager to invest in North Korean rare earth projects so the project never got off the ground.

“We are therefore trying to attract investment from China by handing over the West Sea farms which are not subject to sanctions,” the second source said.

North Korea in 2013 enacted the “Renewable Energy Act,” which would begin Pyongyang’s pursuit of new energy sources like solar, wind and geothermal power.

 Since then, North Korea has continued to import core parts for solar power from China, and has installed solar power in commercial facilities, transportation centers and state-run enterprises to encourage their own electricity production. 

However, the plan to expand solar power in North Korea hit a snag with the coronavirus pandemic and the border closure, sources said. 

RFA attempted to reach the Embassy of China in Washington and the Chinese Ministry of Foreign Affairs but received no response.  

Translated by Claire Shinyoung Oh Lee and Leejin J. Chung. Written in English by Eugene Whong.

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