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Contingencies and Commitments | 12 Months Ended
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Dec. 31, 2021
Contingencies and Commitments [Abstract] |
Contingencies and Commitments |
50. | Contingencies and Commitments
(1) | Ongoing litigations and claims related with contingent liabilities and contingent assets as of December 31, 2020 and 2021 are as follows:
|  | 2020 |  |  | 2021 |
|  | Number of cases |  |  | Claim amount |  |  | Number of cases |  |  | Claim amount |
|  | In millions of won |
As the defendant |  |  | 663 |  |  | ￦ | 550,535 |  |  |  | 683 |  |  | ￦ | 689,415 |
As the plaintiff |  |  | 200 |  |  |  | 729,798 |  |  |  | 284 |  |  |  | 784,453 |
As of December 31, 2021, the Company is party to two ongoing litigations and one arbitration. A group of plaintiffs (consisting of 2,167 individuals) filed a lawsuit against NSSC (Nuclear Safety and Security Commission) regarding NSSC’s approval on May 18, 2015 of extending the operation of Wolsong unit 1 nuclear power plant. The appeal has been dismissed on May 29, 2020, resulting in plaintiffs’ loss. Also, Greenpeace and others filed an administrative litigation against NSSC requesting cancelation of the construction permit of Shin-Kori unit 5 and 6 in September 12, 2016 and lost the lawsuit in February 14, 2019. They appealed the case in March 18, 2019, but the appeal had been closed on April 29, 2021. The Company joined these litigations as a stakeholder after obtaining permission from the court. As of December 31, 2021, in connection with Shin-Hanul unit 3 & 4, the Company has received communications from a vendor for costs incurred for the preliminary work of the main equipment and associated compensation due to the discontinuation of the construction. The Company does not believe that it has a present obligation to this vendor, and that it is probable that the Company will prevail if a lawsuit is filed against the Company. In addition, the Company cannot reliably estimate the potential economic outflow related to the obligation as of December 31, 2021. The Company is the defendant against a number of claims. The following is potentially significant ongoing claims pertaining to the Company:
| 1) | There is an ongoing claim against the Company from a group of plaintiffs (consisting of 3,910 individuals) regarding the contribution to plan assets and payment of retirement benefits. The Company recognized ￦11,730 million as litigation provisions in relation to the lawsuit.
| 2) | There is an ongoing claim against the Company regarding the completion of the waste oil refining power generation plant of Next energy Co., Ltd. The Company recognized the amount of probable outflow of resources as a provision.
| 3) | There are multiple ongoing claims against the Company related to ordinary wages, requesting payment of unpaid wages. The Company believes that the possibility of the outflow of economic benefits is probable on the ongoing and the expected lawsuits. Accordingly, the Company recognized ￦3,233 million as litigation provisions in relation to the lawsuit as of December 31, 2021.
In addition to the abovementioned significant ongoing claims, there are 5 arbitration cases pertaining to the Company as of December 31, 2021 and the significant arbitration cases for the year ended December 31, 2021 are as follows:
| 1) | In relation to the electric power IT modernization project in Kerala, India, Enzen, a subcontractor, filed an arbitration against the Company to the Indian Council of Arbitration due to disagreements in the contract, but the Company has not recognized any provision because the amount and timing of economic benefit outflow cannot be reasonably estimated.
| 2) | Two companies including GE Energy Products France SNC filed an arbitration against the Company to Korea Commercial Arbitration Board regarding additional payment of construction costs, but the Company has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.
(2) | Guarantees of payments and commitments provided to other companies as of December 31, 2021 are as follows:
| 1) | The Company has outstanding borrowings with a limit of USD 275,600 thousand from its creditors such as International Finance Corporation. Regarding the borrowing contract, the Company has guaranteed capital contribution of USD 69,808 thousand and additional contribution up to USD 19,000 thousand for contingencies, if any. Moreover, for one of the electricity purchasers, Central Power Purchasing Agency Guarantee Ltd., the Company has provided payment guarantee up to USD 2,777 thousand, in case of construction delay or insufficient contract volume after commencement of the construction.
| 2) | The Company has provided PT. Perusahaan Listrik Negara performance guarantee up to USD 2,293 thousand and investment guarantee up to USD 43,500 thousand to Mizuho bank and others in proportion to its ownership in the electricity purchase contract with PT. Cirebon Energi Prasarana in relation to the second electric power generation business in Cirebon, Indonesia.
| 3) | The Company has provided MUFG Bank, Ltd. (MUFG) borrowing guarantee up to USD 41,258 thousand in proportion to its ownership in the Equity Bridge Loan (EBL) guarantee with PT. Cirebon Energi Prasarana in relation to the second electric power generation business in Cirebon, Indonesia.
| 4) | The Company has provided the Export-Import Bank of Korea, BNP Paribas and ING Bank with the guarantees of mutual investment of USD 2,192 thousand, which is equivalent to the ownership interest of PT BS Energy and PT Nusantara Hydro Alam, in order to guarantee the expenses related to hydroelectric power business of Tanggamus, Indonesia.
| 5) | The Company has provided USD 18,500 thousand of business performance guarantees to AEP Texas, Inc., for the construction, ownership, operation, and related cost-bearing implementation of electric power transmission equipment regarding Concho Valley solar business in the United States.
| 6) | The Company has provided the syndicate of lenders of PT Indo Raya Tenaga, the business corporation of PT Barito Wahana Tenaga, a guarantee by establishing the right of pledge on the shares of PT Barito Wahana Tenaga for project financing of PT Barito Wahana Tenaga as of December 31, 2021.
| 7) | The Company has provided a guarantee to complete the construction of the waste oil refining power generation plant of Next energy Co.,Ltd. (contract amount : ￦14,700 million) to the financial institution agents, thus the Company is liable to compensate to financial institution agents for the any damages incurred in the event of incompletion of the construction. Also, the power generation guarantee agreement was concluded in connection with the consignment service for management and operations (the repayment period of the principal of the loan) after the completion of the construction. If the amount of power generated falls short of the contracted power generation amount, the Company will be liable to pay compensation for the shortage. The Company has recognized a provision based on the assessment of expected outflow of resources.
| 8) | The Company has provided Axia Power Holdings B.V. and others a performance guarantee up to USD 54,000 thousand for the implementation of Cirebon thermal power generation project in Indonesia.
| 9) | The Company has provided PT Perusahaan Listrik Negara a performance guarantee up to IDR 35,907,215 thousand for the implementation of Tanjung Jati power plant operation project in Indonesia.
| 10) | The Company has provided Export-Import Bank of Korea and others a performance guarantee up to USD 12,090 thousand for the excess project costs of hydroelectric power generation project of Tanggamus, Indonesia.
| 11) | The Company has provided Export-Import Bank of Korea and others a borrowing guarantee up to USD 5,911 thousand for the DSRA guarantee of hydroelectric power generation project of Tanggamus, Indonesia.
| 12) | The Company has provided PT. Cirebon Energi Prasarana a performance guarantee up to USD 43,500 thousand for the fulfillment of subscription obligation regarding Cirebon 2 coal-fired power generation project in Indonesia.
| 13) | The Company has provided Van Phong Power Company Ltd. a performance guarantee up to USD 5,000 thousand for the operation maintenance project in Van Phong, Vietnam.
| 14) | The Company has provided Morgan Stanley Capital Group Inc. a performance guarantee up to USD 30,000 thousand for the implementation of photovoltaic power generation project in USA.
| 15) | The Company has provided Morgan Stanley Renewables Inc. a performance guarantee up to USD 70,000 thousand for the fulfillment of subscription obligation regarding photovoltaic power generation project in USA.
(2) | Guarantees of payments and commitments provided to other companies as of December 31, 2021 are as follows, continued:
| 16) | The Company has provided EUR 10,000 thousand for a performance guarantee to Skandinaviska Enskilda Banken AB (publ) Frankfurt Branch through Kookmin Bank, to guarantee the opening of VAT payment loan account for Guba Buget wind power project in Sweden.
| 17) | The Company has provided EUR 5,022 thousand for a performance guarantee to Microsoft through Kookmin Bank, to guarantee the implementation of the power plant construction for Guba Buget wind power project in Sweden.
| 18) | The Company has provided EUR 9,980 thousand of a performance guarantee to Ellevio through Shinhan Bank, to guarantee the performance of the electric power transmission equipment connection construction for Guba Buget wind power project in Sweden.
| 19) | The Company has provided USD 60,000 thousand of a borrowing guarantee to Shinhan Bank, to guarantee the Equity Bridge Loan (EBL) for the solar power business in USA.
| 20) | The Company has provided a performance guarantee to EDF Energy service, LLC, for the solar power business in USA.
| 21) | The Company has provided USD 76,700 thousand of a performance guarantee to Primoris Renewable Energy, Inc., to guarantee the construction of power plants of the solar power business in USA.
| 22) | The Company has provided USD 54,000 thousand of a performance guarantee to PT. Cirebon Electro Power, for Cirebon coal-fired power plant operation and maintenance project in Indonesia.
(3) | Credit lines provided by financial institutions as of December 31, 2021 are as follows:
Commitments |  | Financial institutions |  | Currency |  | Credit limit |  |  | Used amount |
|  | In millions of won and thousands of foreign currencies |
Commitments on Bank-overdraft |  | Nonghyup Bank and others |  | KRW |  |  | 1,815,500 |  |  |  | 208,018 |
Commitments on Bank-daylight overdraft |  | Nonghyup Bank |  | KRW |  |  | 280,000 |  |  |  | — |
Limit amount available for CP |  | Hana Bank and others |  | KRW |  |  | 1,050,000 |  |  |  | 1,050,000 |
Limit amount available for card |  | Hana Bank and others Banco de Oro |  | KRW PHP |  |  | 47,404 5,000 |  |  |  | 5,529 3,000 |
Loan limit |  | Kookmin Bank and others DBS Bank Ltd and others |  | KRW USD |  |  | 1,780,028 1,644,700 |  |  |  | 1,319,181 167,533 |
Certification of payment on payables from foreign country |  | Nonghyup Bank |  | USD |  |  | 8,700 |  |  |  | 7,213 |
Certification of payment on L/C |  | Shinhan Bank and others |  | USD |  |  | 1,019,834 |  |  |  | 463,355 |
| Shinhan Bank |  | JPY |  |  | 707,337 |  |  |  | — |
|  | Hana Bank and others |  | EUR |  |  | 48,122 |  |  |  | 41,262 |
Certification of Performance guarantee on contract |  | Seoul Guarantee Insurance and others |  | KRW |  |  | 104,705 |  |  |  | 96,658 |
|  | First Abu Dhabi Bank and others |  | USD |  |  | 947,707 |  |  |  | 682,903 |
|  | Korea Development Bank and others |  | JPY |  |  | 620,000 |  |  |  | 620,000 |
|  | Hana Bank |  | EUR |  |  | 3,965 |  |  |  | 3,965 |
|  | Shinhan Bank |  | INR |  |  | 51,678 |  |  |  | 51,678 |
Certification of bidding |  | Hana Bank |  | USD |  |  | 5,200 |  |  |  | 197 |
Advance payment bond, Warranty bond, Retention bond and others |  | Seoul Guarantee Insurance |  | KRW |  |  | 49,874 |  |  |  | 49,874 |
|  | Hana Bank and others |  | USD |  |  | 331,072 |  |  |  | 286,388 |
| Hana Bank |  | SAR |  |  | 6,508 |  |  |  | 6,508 |
|  | Hana Bank and others |  | MXN |  |  | 21,597 |  |  |  | 20,027 |
Others |  | Nonghyup Bank and others |  | KRW |  |  | 610,983 |  |  |  | 29,730 |
|  | Export-Import Bank of Korea and others |  | USD |  |  | 2,625,372 |  |  |  | 1,842,173 |
|  | Standard Chartered |  | AED |  |  | 50 |  |  |  | 50 |
Inclusive credit |  | Hana Bank |  | KRW |  |  | 8,000 |  |  |  | 825 |
|  | Hana Bank and others |  | USD |  |  | 135,078 |  |  |  | 15,633 |
Trade finance |  | Export-Import Bank of Korea and others |  | USD |  |  | 850,000 |  |  |  | 149,328 |
(4) | As of December 31, 2021, blank check and assets provided as collaterals or pledges to financial institutions by the Company are follows:
Guarantor |  | Creditor |  | Assets provided as security |  | Currency |  | Amount |  |  | Description
|  | In millions of won and thousands of foreign currencies
Mira Power Limited |  | International Finance Corporation and others |  | Property, plant and equipment and others |  | USD |  |  | 275,600 |  |  | Collateral for borrowings(*1)
Tamra Offshore Wind Power Co., Ltd. |  | Kyobo Life Insurance Co., Ltd. and others |  | Property, plant and equipment and others |  | KRW |  |  | 171,600 |  |  | Collateral for borrowings(*2)
Gyeonggi Green Energy Co., Ltd. |  | Korea Development Bank and others |  | Cash and cash equivalents and others |  | KRW |  |  | 327,080 |  |  | Collateral for borrowings(*2)
Commerce and Industry Energy Co., Ltd. |  | IBK and others |  | Property, plant and equipment and others |  | KRW |  |  | 110,500 |  |  | Collateral for borrowings(*2)
KOSPO Youngnam Power Co., Ltd. |  | Shinhan Bank and others |  | Cash and cash equivalents and others |  | KRW |  |  | 396,120 |  |  | Collateral for borrowings(*2)
Gyeongju Wind Power Co., Ltd. |  | Shinhan Bank and others |  | Property, plant and equipment and others |  | KRW |  |  | 68,400 |  |  | Collateral for borrowings(*2)
Korea Offshore Wind Power Co., Ltd. |  | Woori Bank and others |  | Property, plant and equipment and others |  | KRW |  |  | 293,400 |  |  | Collateral for borrowings(*2)
Qatrana Electric Power Company |  | The Islamic Development Bank and others |  | Finance lease receivable and property, plant and equipment and others |  | JOD |  |  | 236,570 |  |  | Collateral for borrowings(*1)
KST Electric Power Company, S.A.P.I. de C.V. |  | The Export—Import Bank of Korea and others |  | Finance lease receivable and property, plant and equipment and others |  | USD |  |  | 401,277 |  |  | Collateral for debt securities(*1)
Incheon Fuel Cell Co., Ltd. |  | Kookmin Bank and others |  | Cash and cash equivalents and others |  | KRW |  |  | 276,960 |  |  | Collateral for borrowings(*2)
TS Energy No. 25 Co., Ltd. |  | Kyobo Life Insurance Co., Ltd. and others |  | Property, plant and equipment and others |  | KRW |  |  | 521,281 |  |  | Collateral for borrowings(*2)
Jeongam Wind Power Co., Ltd. |  | KDB Capital Corporation and others |  | Cash and cash equivalents and others |  | KRW |  |  | 221,631 |  |  | Collateral for borrowings(*2)
(*1) | Based on the credit limits of the respective loans.
(*2) | As of December 31, 2021, the Company has established guarantees for pledge for transfer of rights of long-term borrowings, pledge for insurance claims, pledge for shares, etc.
The Company has ￦1,197 million of project loans from the Korea Energy Agency as of December 31, 2021. The Company has provided blank check as a repayment guarantee.
(5) | The Company temporarily suspended operations of the Gangneung hydroelectric generating plant, with a carrying amount of ￦68,674 million as of December 31, 2021, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations of ￦44 million and depreciation on the idle assets of ￦3,621 million are recorded in other expenses for the year ended December 31, 2021. Regarding the improvement of water quality, the results of damages compensation for the local residents cannot be reasonably estimated, and the Company is in negotiations with Gangneung City and related stakeholders to restart the Gangneung hydroelectric generating plant as of December 31, 2021.
(6) | Due to the Korean government’s announcement of suspension of operation in the Gaeseong Industrial District, it is uncertain if the Company can exercise the property rights for the Company’s facility in the Gaeseong Industrial District as of December 31, 2021. The book value of facility is ￦14,451 million and the amount of trade receivables related to the companies residing in Gaeseong industrial complex is ￦2,911 million. The outcome of this event cannot be reasonably estimated as of December 31, 2021.
(7) | In connection with the electric power IT modernization project in Kerala, India, negotiations are underway due to disagreements in the contract regarding the existence and the scope of a warranty obligation. However, the Company has not recognized any provision because the amount and timing of economic benefit outflow cannot be reasonably estimated as of December 31, 2021.
(8) | To prevent the spread of COVID-19, a variety of prevention and control measures, including movement restrictions, are being implemented worldwide, and as a result, the global economy is being affected extensively. In addition, various forms of government policies are being announced to cope with COVID-19. The Company was unable to reasonably estimate the impact of COVID-19 and the impact of the government support policies on the Company’s consolidated financial statements as of December 31, 2021, and the resulting effects have not been reflected in the consolidated financial statements.
(9) | The Korea Institute of Energy Technology (KENTECH) was established in April, 2020, in accordance with the “Basic plan for the establishment of KENTECH (July, 2019)”. By the special law to create KENTECH, the Company, government, and local government may contribute to the fund. The Company will decide whether to contribute to the fund on a board resolution after consulting with relevant organizations considering its financial situation by year.

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