Public institutions' debt to near W1,000tr by 2030, with LH leading surge

The combined debt of 37 major public institutions is projected to grow by around 220 trillion won ($160 billion) over the next four years, approaching 1,000 trillion won by 2030.

Korea Land and Housing Corporation, which has been aggressively ramping up housing supply, is expected to account for the bulk of that increase — with its debt rising by more than 175 trillion won — accelerating the deterioration of the overall public sector's financial position.

By contrast, the debts of Korea Electric Power Corporation and Korea Gas Corporation are expected to fall sharply as their operating profits improve.

The Ministry of Economy and Finance discussed the "2026–2030 Medium-Term Financial Management Plan for Public Institutions" at the 10th Public Institutions Policy Committee meeting Tuesday, chaired by Second Vice Minister Heo Jang.

The plan covers 37 institutions with assets of at least 2 trillion won whose founding legislation includes government loss-compensation provisions. Korea Workers' Compensation and Welfare Service and the Korea Environmental Industry and Technology Institute were newly added to this year's list.

According to the plan, the combined debt of the 37 institutions — currently 778.3 trillion won — is forecast to rise by 219.1 trillion won to 997.4 trillion won by 2030.

Over the same period, the debt-to-asset ratio is expected to climb 8.4 percentage points, from 208.2 percent to 216.6 percent.

Korea Land and Housing Corporation's expanding financial burden is seen as the primary driver behind the overall debt increase and the worsening debt ratio.

Under the plan submitted by the corporation, its debt is set to rise from 197.5 trillion won this year to 372.8 trillion won by 2030 — an increase of 175.3 trillion won. Its debt ratio is expected to climb 100.6 percentage points, from 250.6 percent to 351.2 percent.

To expand housing supply, the corporation plans to sharply increase new housing ground-breakings while continuing its purchase-and-lease program for both newly built and existing homes in line with demand. As the volume of rental housing under management grows, the corporation faces mounting financial pressure from rising investment outlays and prolonged capital recovery timelines.

The remaining 36 institutions, excluding Korea Land and Housing Corporation, are expected to see their combined debt grow by a comparatively modest 43.9 trillion won — from 580.7 trillion won this year to 624.6 trillion won by 2030.

Their debt ratio is projected to fall 20.6 percentage points, from 196.8 percent to 176.2 percent.

Major institutions including Korea Electric Power Corporation and Korea Expressway Corporation plan to continue self-help efforts — including internally driven spending restructuring and revenue growth — even as they expand policy investment.

By sector, the housing and social overhead capital segment is expected to see the sharpest debt increase, driven by expanded investment stemming from Korea Land and Housing Corporation's shift toward direct housing construction.

The combined debt of seven SOC-sector institutions is projected to rise from 311.6 trillion won in 2026 to 502.2 trillion won by 2030 — an increase of 190.6 trillion won — with the debt ratio expected to climb 58.1 percentage points to 254.9 percent.

Over the same period, the debt of 11 energy-sector institutions is forecast to grow by 18 trillion won, from 299.3 trillion won to 317.3 trillion won, driven by expanded investment in power grids and other infrastructure. However, the sector's debt ratio is expected to fall sharply — from 509.9 percent to 381.7 percent — as Korea Electric Power Corporation, Korea Gas Corporation and others improve their operating profits.

The 11 financial-sector institutions are projected to see their debt decrease by 500 billion won, from 140.7 trillion won to 140.2 trillion won, as repayments of policy funds disbursed during the pandemic increase. Their debt ratio is also expected to improve, falling from 101.8 percent to 88.0 percent.