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Seven big balance sheets carry over two-thirds of the 2030 interest bill at South Korea's 13 struggling agencies

Thirteen South Korean state agencies will earn too little to cover interest every year through 2030, when the bill hits about 4.3 trillion won. Most of it sits with seven big bodies such as the national health insurer, so closing the chronic loss-makers would leave the bulk in place.

The Investor · Invest desk

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Illustration accompanying Seven big balance sheets carry over two-thirds of the 2030 interest bill at South Korea's 13 struggling agencies
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The other seven agencies owe about 69% of 2030 interest Projected 2030 annual interest expenses of the struggling agencies, split between the six chronic loss-makers and the other seven.

Bar comparison of projected 2030 annual interest expenses: the six chronically weak agencies about 1.3407 trillion won; the other seven agencies about 2.9451 trillion won, about 69% of the total.

Projected annual interest expense in 2030 In trillion won

The other seven agencies owe about 69% of 2030 interest (Projected annual interest expense in 2030)
ItemValueClaim
Six chronic loss-makers1.3407 trillion won13
Seven other agencies2.9451 trillion won19

What happened

  • The projections come from Ministry of Finance and Economy financial plans for 37 large public bodies, obtained by Rep. Kim Sang-hoon of the People Power Party.
  • Agencies with interest cover below 1 fell from 17 in 2021 to 11 last year, but the plan has the count rising to 15 this year and 18 by 2030.
  • Six of the 13, including the Korea Railroad Corporation and Korea Airports Corporation, also missed cover in every year from 2021 to 2025, making a decade of shortfalls.

Why it matters

  • constraint Merging two agencies that each miss interest cover produces one that still misses it, so a merger programme would cut the number of weak agencies without shrinking what they owe.
  • exposure Two of the 13 are power generators whose cover fell as generation costs rose, so part of the 2030 tally will move with fuel prices whatever happens to the organisation chart.
  • decision The mine rehabilitation agency and the workers' compensation service lose money before interest is counted, so debt relief alone would leave both in the red and any repair has to reach operations.

We'd expect the six agencies with a decade of shortfalls to head any merger or closure list, and they owe a minority of the money. Their interest is projected to rise 16.6%, from about 1.1496 trillion won last year to 1.3407 trillion won in 2030 [13]. That 2030 figure is roughly 31% of the combined bill of 4.2858 trillion won for all 13 [4][5][18].

The other seven are the National Health Insurance Service, the two generators Korea South-East Power and Korea Midland Power, and four others: the Korea Land & Housing Corporation, the Korea Housing Finance Corporation, the Korea Asset Management Corporation and the Korea Industrial Complex Corporation [11]. They owe the remaining 2.9451 trillion won, about 69% [19]. They also held about 413.4 trillion won of the group's 469.7 trillion won of assets at the end of last year, or 88% [7][20].

Combining weak agencies adds their gaps together. The interest coverage ratio is operating profit divided by interest expense [9]. When two bodies each earn less than their interest, the merged body does too. The Korea Airports Corporation is projected to earn 2.5 billion won of operating profit against 110.8 billion won of interest in 2030 [15]. The mine rehabilitation agency is projected to lose 126.9 billion won against 303.4 billion won of interest [16]. Put together, the pair would post a ratio of about minus 0.30 and miss their interest by 538.6 billion won, exactly the sum of their separate shortfalls of 108.3 billion and 430.3 billion won [21].

The six also differ from one another. Korail's ratio is projected to climb from minus 0.80 last year to 0.99 in 2030 [14]. About 1% more operating profit on the same interest would take it over 1 [23]. At the workers' compensation service, the forecast 2030 interest of 1.6 billion won is about a sixth of its 10.2 billion won operating loss [17][22].

Sedaily's report, citing analysts, said the government must craft measures to repair the agencies' financial structures, not merely merge and abolish organisations [3]. Fuel costs could change the picture. "Generation costs have risen, making it difficult for power companies to absorb the burden," a Ministry of Finance and Economy official said [2]. If those costs ease, the two generators could recover and the 2030 tally would shrink. For that part of the group, the problem would then look cyclical. The forecasts themselves could also move: these are the ministry's own plans, and Korail sits close enough to 1 that a small miss in either direction changes its classification [14].

Even so, we think the figures back the analysts. We would be wrong if a recovery at the generators alone brought the count of agencies below 1 back near last year's low [10].

On the budget, the link runs through the rules that define the group. Agencies qualify if they hold assets of at least 2 trillion won or if their founding statutes provide for government coverage of losses [8]. The ministry documents, as reported, do not include an estimate of what the state would have to cover or borrow.

What to watch

  • Whether Korea South-East Power and Korea Midland Power recover toward last year's ratios if generation costs ease, pulling the projected 2030 count down.
  • Whether Korail's projected 0.99 ratio for 2030 crosses 1 in later revisions of the ministry plan.
  • Any government estimate of loss coverage or borrowing tied to agencies whose statutes provide for state coverage of losses.

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  1. [1]

    Korea South-East Power's interest coverage ratio is expected to drop to 0.66 this year from 3.08 last year, and Korea Midland Power's to 0.64 from 1.53; by 2030 they are projected at 0.39 and minus 0.31.

    ReportedSupported2 sources— create a free account to open themView cited source
  2. [2]

    "Generation costs have risen, making it difficult for power companies to absorb the burden," a Ministry of Finance and Economy official said.

    ReportedSupportedSource: Unnamed Ministry of Finance and Economy official, quoted by Sedaily2 sources— create a free account to open themView cited source
  3. [3]

    Analysts say the government must craft measures to repair the institutions' financial structures, not merely merge and abolish organizations.

    ReportedSupportedSource: Unnamed analysts cited by Sedaily2 sources— create a free account to open themView cited source

Sources

1 independent publisher whose own reporting we read for this story.

  1. en.sedaily.com

    1 article · October 11, 2026

    13 State-Run Agencies to Miss Interest Coverage Through 2030

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