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Korea Electric May Buy Stake in Philippines' Salcon Power

Korea Electric Power Corp. (KEP), the nation's biggest generator, said it may buy as much as 40 percent of Salcon Power Corp. in the Philippines to expand its business in the Southeast Asian country.

``Separate from our plan to build a power plant there jointly with Salcon, we are also going to buy a stake in the company,'' Kim Nam Sik, a spokesman for Korea Electric, said in Seoul.

Korea Electric's Philippine unit agreed to start due diligence in preparation for buying 30 to 40 percent of Salcon Power, Salcon told the Philippine Stock Exchange Wednesday.

The state-run South Korean utility is developing overseas projects to diversify its sources of revenue. Korea Electric plans to bid for the construction of four nuclear power plants in China, Chief Executive Han Joon Ho said last month.

Salcon Power operates facilities in the Naga power complex in the central province of Cebu. The complex, which has 203.8 megawatts of installed capacity, has two gas turbines, two coal- fired power plants and six diesel power generators.

Korea Electric has said it plans to build a $250 million coal-fired power plant in Cebu in a joint venture with Salcon. Korea Electric will take 60 percent of the project, company spokesman Kim said.

South Korea's energy minister Lee Hee Beom and Philippines energy secretary Vincent Perez signed a non-binding agreement in June, and agreed to support the Cebu power project on a government level, South Korea's energy ministry has said.

Korea Electric has two plants in the Philippines. It owns and operates a 1,200-megawatt gas-fired power plant in Ilijan, south of Manila, and a 650-megawatt oil-fired power plant in Rizal, east of Manila.

To contact the reporter on this story: In-soo Nam in Seoul at inam@bloomberg.net.

To contact the editor responsible for this story: Tony Jordan at tjordan3@bloomberg.net.

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