Iljin Electric bags $333 mn high-voltage transformer deal in US

Iljin Electric Co. has won its largest-ever 431.8 billion won ($333.2 billion) order to supply high-voltage transformers to a US energy company, the South Korean heavy electric equipment producer announced in a regulatory filing on Monday.

Under the deal, the Korean company will build and supply 15 different types of transformers, including 345-kilovolt ones, to the US energy company on the East Coast from 2026 to 2030.

The two parties have agreed to keep the name of the US company confidential. 

This is the biggest single order for the Korean company since its inception in 1968, it said.

Thanks to the order, Iljin Electric’s transformer factory will fully run until 2026, the company explained.

Iljin Electric plans to ramp up its production capacity to churn out transformers worth 433 billion won in 2026 from 260 billion won at end-2023 on expectations of additional heavy electric equipment orders from the US, where investments in replacing old power-generating infrastructure and building new renewable energy power plants are burgeoning under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.

According to the US Energy Information Administration, the country’s power generation is forecast to grow 32% from 2023 to 1,543 gigawatts (GW) in 2030.

Considering that about 70% of large transformers installed across the nation are 25 years or older, nearing the average transformer life of 30 to 40 years, replacement demand for transformers in the US is expected to grow.

Kospi-listed Iljin Electric inched up 0.1% to close at 13,690 won on Tuesday.

Write to Byung-Keun Kim at bk11@hankyung.com

Sookyung Seo edited this article.