North Korean Economy Watch

Institute for Far Eastern Studies (IFES)
2011-8-24

Kim Jong Il’s visit to Moscow on August 20 is sparking interest for the future of economic cooperation between the two countries.

According to the KCNA, Russian President Dmitry Medvedev expressed interest to increase trilateral cooperation between the ROK-DPRK-Russia in the gas, energy, and railroad sectors. In the message sent from Medvedev to mark the 66th anniversary of independence from Japanese colonial rule, “plans to expand cooperation with the DPRK and the ROK in gas, energy, and railroad industry” were emphasized.

The cooperation projects are evaluated to have “great economic and political significance contributing to the stability in Northeast Asia and denuclearization of the Korean peninsula.”

In July 4, the KCNA reported that the delegates from the Russian energy giant Gazprom headed by Chairman Alekhsandr Ananenkov visited Pyongyang to discuss energy cooperation, although details of the visit was not elaborated. Ananenkov was reported to have met with North Korean officials in gas and oil industriesto discuss bilateral cooperation in these areas.

Russia has also expressed interest in linking gas pipelines to export natural gas to South Korea via inter-Korean railroad system.

A spokesperson of the foreign ministry of the DPRK reported on the recent visit from the vice-foreign minister and chief representative of Russia on Six-Party Talks, Aleksei Borodavkin, this past March. In the statement, the Russian government expressed concerns for improving inter-Korean relations and stressed prospects of the tripartite economic cooperation projects with North and South Korea including the construction of railways, gas pipeline, and a transmission line linking the three countries. The DPRK also expressed support for the upcoming economic cooperation projects.

In result, the main agenda in the bilateral economic cooperation between Russia and North Korea entails railway, gas pipeline, and transmission line construction.

President Lee Myung-bak has met with the Russian president Medvedev in September 2008 in Moscow. At the summit, the two presidents reached an agreement to pursue projects to export Russian PNG or pipeline natural gas to South Korea through a pipeline via North Korea from 2015.

Immediately following the summit, South Korea’s Korea Gas Corporation (KOGAS) and Russia’s Gazprom signed a memorandum of understanding (MOU) to jointly study the possibilities of constructing a long-distance pipeline running from Vladivostok. Under the contract, Russia will send at least 7.5 million tons of natural gas annually for a period of 30 years through a pipeline to South Korea via North Korea.

This joint study between ROK-Russia is expected to serve as a momentum in bringing diverse economic cooperation between North and South Korea as well.

While it is still premature to judge the long-term outlook for such trilateral economic cooperation, its effects are anticipated to contribute to stability and peace in the Northeast Asian region.

Additional Information: here is a summary of the recent Kim Jong-il — Medvedev summit.

UPDATE 8 (2012-2-14): I have been notified that the certification program is proceeding. From a reader:

There has been a statement by the 1718 committee (on sanctions) that CDM projects in NK do not violate UN rules.

[Seven] hydropower plants did get their validation and underwent a process of “clarifications and corrections” as foreseen by UN rules. After the final report (which might have been already issued or might be issued soon) they will go for final vote to the UNFCCC.

Currently, North Korea works on projects as diverse as methane gas from coal mines, biogas and electricity-saving light bulbs.

UPDATE 7 (20120-1-23): Read an update on the Huichon Power Stations 1 & 2 and the Ryesonggang Power Stations 2 & 3 here.

UPDATE 6 (2011-7-11): It looks like none of the DPRK power stations have been approved by the UNFCC for the CDM program as of this date.  A reader notes:

[I] just searched through the entire CDM database with the category numbers for these projects, and as far as I can see none of these has got beyond validation phase['s] comments phase, and judging by some of the comments – “It is evident from the PDD [Project Design Document] that the values are consistent and it is definitely forged and cooked up values to show a non CDM project as a CDM project” – being one of the more polite, that I’d be amazed if they make it beyond that. [It] looks like the DPRK hasn’t got its environmental and managerial audit systems quite up to date yet.

UPDATE 5 (2011-7-11): I just checked the UNFCC web page, and it appears that in addition to the hydro power plants mentioned below, the North Koreans also submitted the “Energy Efficiency Improvement Project in Pyongyang Textile Factory” [sic] for carbon offsets on May 23, 2011. According to the UNFCC web page, the project is in the portfolio of the Carbon-Trade Division, GBCIO, Ministry of Foreign Trade.

UPDATE 4 (2011-7-11): DPRK begins construction of Ryesonggang Power Stations 3 and 4

Pictured above (Google Earth): Ryesonggang Youth Power Stations 1, 2, and 6 (례성강청년발전소).

Back in March of this year, the DPRK registered eight potential power plants with the UNFCC which it intended to construct to obtain carbon offset credits.  These eight hydro-power plants are:

Hamhung Hydropower Plant No.1
Hamhung 20MW Hydropower Plant No. 2
Kumya Hydropower Plant
Paekdusan Songun Youth 14MW Hydropower Project No.2
Ryesonggang Hydropower Project No. 3
Ryesonggang Hydropower Project No. 4
Ryesonggang Hydropower Project No. 5
Wonsangunmin 20MW Hydropower Project No. 1

On June 25th the DPRK evening news featured footage of the construction of the Ryesonggang Youth Power Station No. 3 (례성강청년3호발전소).  I have uploaded the footage to YouTube and you can see it here.

On June 28th the DPRK evening news featured footage of the construction of the Ryesonggang Youth Power Station No. 4 (례성강청년4호발전소).  I have uploaded the footage to YouTube and you can see it here.

I have not had the time to pinpoint the exact locations of these power stations using Google Earth.  Since the imagery is older, it will take some time to match up the mountain contours.  However, we have a general idea where they are located: between the Ryesonggang Power Stations 2 and 6.  These are mapped out in the image at the top of this post.  The satellite imagery is of Thosan (토산군) and Kumchon (금천군) counties.

Since I have a job, am in graduate school, am a landlord, and running this web page, I have not had time to follow up with the UNFCC to see if they have approved these projects for the Clean Development Mechanism (CDM). If there is an enterprising journalist or reader who cares to find out the answer, please let me know.

UPDATE 3 (3/23/2011): According to the UNFCC web page (select Democratic People’s Republic of Korea in the “Host Party” box), these are the eight power stations that have been submitted for consideration:

Hamhung Hydropower Plant No.1
Hamhung 20MW Hydropower Plant No. 2
Kumya Hydropower Plant
Paekdusan Songun Youth 14MW Hydropower Project No.2
Ryesonggang Hydropower Project No. 3
Ryesonggang Hydropower Project No. 4
Ryesonggang Hydropower Project No. 5
Wonsangunmin 20MW Hydropower Project No. 1

The UNFCC web page does not mention the locations, size, or power generation capacity for most of the dams, but I am sure that information will trickle out over time. With the exception of the Kumya Power Station (See satellite image below), none of these facilities are visible on Google Earth–but related facilities are: the Paektusan Power Station 1 (See satellite image below) and Ryesonggang Power Station 1, 2, 6 (See satellite image below).  The Hamhung Power Stations are probably in or near Hamhung, and the Wonsangumin project is probably near Wonsan.

And according to an email from the UNFCC:

This list contains all the projects which have already started and for which a notification of CDM prior consideration has been submitted. This notification is necessary to prove that the incentive of the CDM was a decisive factor for taking up the project when a project has started before a project design document (PDD) has been published for global stakeholder consultation or a new methodology in connection with the project has been submitted. However, kindly note that these projects have not yet entered the CDM project cycle as lined out in the CDM rules, requirements and procedures, and to submission for registration has yet been made.

Further details on the CDM project cycle are available here: http://cdm.unfccc.int/Projects/diagram.html

More information will be added here as time passes.

UPDATE 2 (3/11/2011): The DPRK has apparently registered eight power plants with the UNFCC.  According to Reuters:

North Korea has registered eight hydroelectric plants with the United Nations, and if approved, could allow the world’s most reclusive state to sell carbon offsets to earn precious hard currency.

These hydropower projects were registered with the United Nations Framework Convention on Climate Change (UNFCCC) for prior consideration in getting carbon credits, some of which have a capacity of 20 megawatts, the UNFCCC website showed.

Prior consideration is the first step for accreditation toward the U.N.’s Clean Development Mechanism that allows developing countries to earn tradeable carbon credits for emissions from clean-energy projects.

Bernhard Seliger, a messenger for North Korean officials on these projects, said the United Nations uploaded the information on Thursday after he submitted related forms on behalf of the North Korean government’s carbon trade division in late February.

“I have no idea when the U.N. makes a decision… North Korea has to finish the power plants, which up to now are only half-finished dams,” Seliger, Hanns Seidel Foundation’s representative in South Korea, told Reuters via email.

Analysts questioned the demand for carbon credits from North Korea, concerned the money might be siphoned off to nuclear arms or other military projects.

The UNFCC web page is not stranger friendly.

UPDATE 1 (3/8/2011): According to the Guardian:

North Korea hopes to earn much-needed hard currency by selling UN-backed carbon offsets from a series of hydro-power projects, as the country faces sanctions over its nuclear weapons programme.

If approved and registered by the UN, these would be the first projects for North Korea under a scheme called the Clean Development Mechanism (CDM). This allows developing countries to earn tradeable carbon credits for emissions reductions from clean-energy projects.

Some analysts questioned the demand for carbon credits from North Korea, with fears the money might be siphoned off to nuclear arms or other military projects.

The government has asked the Hanns Seidel Foundation of Germany, which focuses on humanitarian issues, to act as a go-between by working with UN-approved verification agency TUV Nord.

According to Bernhard Seliger, the foundation’s representative in South Korea, North Korea is initially looking at trying to get approval for three hydro power plants of 7-8 megawatts (MW).

Seliger visited the three hydro-plant construction sites in the north-east corner of the country in January.

In a statement, TUV Nord confirmed the foundation had engaged their services.

“In this respect, TUV Nord intends to verify hydropower dams in North Korea once pre-registered with United Nations framework conventions on climate change [UNFCCC] via the Beijing branch of its Chinese subsidiary TUV Nord Guangzhou,” it said.

If registered, the plants could yield millions of euros over several years.

Beijing-based lawyer Tom Luckock, who specialises in projects that curb greenhouse gas emissions, estimated that an 8 MW hydro plant could yield about 23,000 UN offsets a year.

The offsets, called Certified Emissions Reductions (CERs), are generated from registered CDM projects, such as wind farms, that are rewarded for reducing greenhouse gas emissions.

The offsets currently trade at nearly €12 (£10) each and are bought by governments in rich nations that need to meet UN emissions reduction targets.

Europe is the biggest buyer, with large polluting firms allowed to buy the offsets to meet a portion of their emissions reduction targets under the EU’s emissions trading scheme.

“Finding ways to secure foreign currency is the priority for North Korea, which is linked to everything from food to raw material imports to boost reduced productivity,” said Cho Myung-chul, a senior researcher at the Korea Institute for International Economic Policy.

…

Seliger said North Korea, which signed the UN’s Kyoto Protocol climate pact in 2005, was also interested in biomass power generation projects under the CDM.

The UN-approved national agency that assesses and approves CDM projects in North Korea was not available for comment.

Questions remained on demand for North Korean CERs.

“Even if they open up, who in the world wants to pay for North Korea that is blamed for its nuclear weapons programme?” said Choi Soo-young, a senior researcher at the Korea Institute for National Unification.

Cho said the UN needed to prevent outside cash going into its nuclear development activities, while Luckock, of global law firm Norton Rose, said: “Their limited access to hard currency has to be a concern for buyers – the damages clauses will carry limited weight without some security there.”

Another challenge is that North Korea would have to make public its energy consumption and generation data and disclose information on the amount of energy linked to the hydro project.

“Annual inspection, constant measurement and energy flow posting on the [UNFCC] website – all these things are new for North Korea,” Seliger said.

According to the AFP:

“We are talking about eight power plants, with the smallest size about 7.5 megawatts. These are not big projects but small or medium-sized projects,” Bernhard Seliger told AFP.

None has yet been completed, he said.

“I saw some (construction) sites in South Hamkyong province but that’s not all. There are other plants in other regions,” Seliger said, adding that some of the projects are led by the UN Development Programme.

The Hanns Seidel Foundation has been working since 2003 to build the North’s development capacity, and in 2008 organised a seminar on carbon trading for Pyongyang officials at their request.

The tradeable credits, called Certified Emissions Reductions, are awarded for approved clean-energy projects such as hydropower plants or wind farms.

Big polluters elsewhere in the world can buy them as part of their efforts to cut emissions.

Seliger said his foundation is helping the North to prepare for the auditing process required to join the UN carbon credit trading system known as the Clean Development Mechanism.

“One good thing about this project is that it is very transparent, involving monitoring and auditing on an annual basis… I think it is very good for North Korea to participate in such an international regime,” said Seliger.

An official at a South Korean state agency, the Korea Energy Management Corp, said registration would take at least a year or two and it was unclear how much the North would be able to earn if approved.

The official, who declined to be identified, said a typical eight-megawatt hydropower plant could yield about 19,500 carbon credits each year, each of which was currently traded at 12 euros in global markets.

This would amount to around $327,000 a year.

But some buyers may shun the communist state, given its history of nuclear and missile development which has led to international sanctions.

“Government buyers will certainly shy away from dealing with the North,” said Koo Jung-Han, a researcher at the Korea Institute of Finance.

“But private companies have few reasons not to buy credits from the North as long as it can offer a competitively low price. However, the big question is whether the North will be able to build the plants without outside financiers.”

Koo said that countries hoping to buy carbon credits from upcoming overseas projects often encourage investment in the ventures by their own finance companies.

“But what kind of financial companies will take a plunge in projects in such a volatile, politically risky country like North Korea?”

The North suffers persistent power shortages even in the showpiece capital Pyongyang.

Many rural areas receive power only during key agricultural seasons, and must rely for the rest of the year on alternative fuels, according to a recent policy paper published by the Nautilus Institute think-tank.

Here are the web pages for the Hanns Seidel Foundation and the UNFCCC Clean Development Mechanism (CDM) Program.

I am not sure which hydro power stations the DPRK is planning to submit to the UN, but many have been been highlighted in North Korean “media” in recent years:

Kumya River Dam
A dam is being constructed in Kumya County, South Hamgyong Province, to provide electrical power. Kim Jong-il last visited in August 4, 2010. It is just one of several dams under currently under construction in the DPRK.

Here is a satellite image of the Kumya dam’s construction (Google Earth: 11/25/2008,  39.574232°, 127.104736°)

This new reservoir will flood the locations of three villages (리): Ryongnam-ri (룡남리), Ryongsang-ri (룡상리), and Ryongchon-ri (룡천리).

Estimates of the reservoir size are made by me, but it is fairly obvious where the North Korean engineers expect the reservoir to flood because they have already relocated the villages from their former locations in the flood zone.

Kumjingang River Power Stations
Beginning in 2000, the DPRK has constructed three power stations on the Kumjin River (금진강) in  South Hamgyong Province.  The first was the Kumjingang Power Station (금진강발전소).  The second was the  Kumjingang Hungbong Youth Power Station (금진강흥봉청년발전소).  The third was the Kumjingang Kuchang Youth Power Station (금진강구창청년발전소).  All three are pictured below on Google Earth:

It does not appear that these projects have resulted in dislocated villages.

Wonsan Youth Power Stations
Below is a satellite image of the Wonsan Youth Power Stations No’s. 1-4 (원산청년발전소).   These projects required the construction of both the Kuryong Reservoir (구룡저수지) and an appx 8.5 mile (13.69km) tunnel to link the hydro power stations with their power source.  The inaugural ceremony for these facilities was on January 10, 2009.

The construction of the Kuryong Reservoir resulted in the dislocation of three villages: Kuryong-ri (구룡리), Konja-ri (건자리), and Haerang-ri (해랑리).

Orangchon Power Station No. 1
Kim Jong-il offered guidance at the Orangchon Power Station (어랑천1호발전소) in February 2007.  This facility will probably not be submitted to the UN for scrutiny because it lies just outside the security perimeter of what human rights groups assert is Kwan-li-so No. 16.

Anbyon Youth Power Stations No’s 1 & 2
The Anbyon Power Stations (안변청년1-2호발전소, 38.954400°, 127.538912°) are powered by waters from the Imnam Reservoir (임남저수지) via an underground tunnel nearly 45km in length.  Much more here.

The Imnam Reservoir flooded Chondo County’s capital city as well as appx 14 villages. The South Korean government was so worried about the Imnam Reservoir being used as a weapon that they built a dam downstream to prevent flooding should the DPRK release a large volume of water (38.209539°, 127.848760°).

Ryesonggang Youth Power Stations 1-6
Some of the Ryesonggang Youth Power Stations (례성강청년1-6호발전소, 38.367696°, 126.781096°) appear to be under construction in North Hwanghae Province.  The North Korean “media” has only broadcast images of the Ryesonggang Power Stations 1, 2, and 6 (all completed), so I presume that power stations 3, 4, and 5 are too new to show up on available Google Earth Satellite imagery. Below I post images of the distance between power stations 1 and 6 as well as close-ups of both facilities.

Power Station No. 1 was completed in 2007 and most recently received media attention in South Korea in September 2009 when the DPRK released a massive amount of water from its dam (Hwanggang Dam), causing floods in South Korea that killed six people. An estimated 40,000,000 short tons (36,000,000 t) of water was dumped during the flood, causing the water level at the border of Gyeonggi-do to leap from 7.5 feet (2.3 m) to 15.1 feet (4.6 m).

Power Station No. 2 (38.324008°, 126.673366°) has been completed, but it is too new to appear on Google Earth satellite imagery.  I have drawn it on Google Earth below:

Construction of Power Station No. 2 resulted in the dislocation of approximately 27 houses, but I have not been able to determine if any other villages were relocated due to construction of the other facilities.

Paektusan Songun Youth Power Stations
The North Korean media has also done a lot of advertising for the Paektusan Songun Youth Power Stations (백두산선군청년발전소) in Paekam County, Ryanggang Province (41.716931°, 128.786163°).

These dams have resulted in the dislocation of  two small communities as well as the severing of the old railway lines that connected Unhung, Kilju and Paekam with Musan.  Maybe the railway lines have been moved to accommodate the new dams, but it is also unclear if these line were in use to begin with.

Pukchang Ryongsan Power Station
Up until recently I believed the Pukchang Ryongsan Power Station (북창룡산발전소, 39.596238°, 126.266478°) was a large-scale river-straightening project, but according to recent KCTV footage (which I posted to Youtube here) it is in fact a hydro power station.  Work on this project began sometime around the spring 2002 (as best I can tell).

Huichon Youth Power Stations
The Huichon Youth Power Stations No. 1 & 2 have received the most attention in the North Korean media.  I recently located them and will post something soon.

Since the DPRK will likely be subjecting several of these (or other) power plants to international scrutiny, I look forward to seeing that data published.  KCNA is short on details and the disclosed information would facilitate more accurate assessments of the DPRK’s domestic hydro-power generating capacities.

A reader writes in with the following comments:

I would like to share some comments on the potential CDM projects in north Korea as i have been working on this field for many years now.

Concerning existing hydropower plants:
To be eligible to a CDM project, one of the first criteria is the additionality of the project. You have to prove (the rules are very stricts) that the project would not have been launched without the consideration of the revenues from the reselling of the CERs.
So the Dams that have already been buit are not eligible.

Concerning hydropower plants that are being implemented:
The first step of a CDM project is to notify to the UNFCCC secretariat and to Designated National Authority (in this case the Secretariat of the National Coordinating Committee of Democratic People’s Republic of Korea for Environment) that you are seeking to establish your project as a CDM project.
Up to now, no such notification has been received by UNFCCC so it would be quiet difficult for projects being implemented to ask for the CDM status (i mean nearly impossible).

Some facts concerning future hydropower projects:
From the day you send the notification that you are seeking the CDM status to the day you are actually given the status, it takes in average 2 to 3 years (they would have to build the plants during this period)
Then it can be at least another year before you receive the CERs.
The price of 12 euro for a CER is for secondary market. The price for primary CER (directly sold by the producer) would be much less than 8 euro.
The figure of 20 000 CERs/year is completely unpredictable for the moment, here is a simplification of the calculation:
One CER is equal to one tonne of CO2 equivalent that would be avoided by producing clean electricity. For example when you produce 1 MW electricity from coal, the process releases X tonnes of CO2 in the atmosphere but when you produce 1 MW from a hydropower plant, you do not release CO2.
In order to calculate what the CDM project would be able to claim, we would have to know the CO2 emission factor of the North Korean grid and then multiply it by the amount of MWh produced by the CDM project.
If most of the electricity produced these days in North Korea already comes from hydropower plants, then the national emission factor will be low and the CDM project will not avoid a lot of CO2 emission (and so not earn a lot of €)
Without the capacity of the future project and the national emission factor, it is impossible to estimate the amount of CERs the project could generate.

The CDM status seems quiet unrealistic to obtain for North Korean projects but other international agreements are discussed these days and their outcome may be more adapted.

ORIGINAL POST (2011-1-31): According to Radio Free Asia:

Nuclear-armed but cash-starved North Korea has expressed interest in joining the world carbon market in an apparent bid to earn precious hard currency and avoid international sanctions, an expert told RFA.

But the secretive Kim Jong Il regime has to disclose critical information, such as energy consumption data as well as methods by which it derives energy, to be eligible for funding under the United Nations’ Clean Development Mechanism (CDM), said the North Korea expert, speaking on condition of anonymity.

The CDM is aimed at encouraging companies or organizations in the developed world to invest in carbon dioxide emissions-saving projects in developing countries.

In return for funding and technology transfer, investors receive carbon credits, which can then either be traded on carbon markets or used to reduce their own emissions tally if they are subject to a domestic cap.

The Kyoto Protocol set emission caps for 38 countries through 2012, establishing the CDM as a worldwide carbon market. It is a cornerstone of the group’s efforts to tackle global warming.

The North Korea expert told RFA on Jan. 13 that Pyongyang intended to apply for funding via the CDM and that the regime might list its proposed hydro-electricity power projects under the U.N. mechanism.

UN refrains from comment

When contacted on the North Korea move, the U.N. Framework Convention on Climate Change (UNFCC), the secretariat charged with implementing the global environmental treaty to stabilize greenhouse gas concentrations, said it would refrain from commenting on individual country projects.

The North Korea expert estimated that one ton of carbon dioxide would trade for about U.S. $26 dollars and if a hydro-electric power project was registered under the CDM, depending on the carbon credit bid price, about U.S. $1 million dollars could be earned annually.

A hydro project registered under the CDM would need to be evaluated by U.N. inspectors for it to qualify for carbon credits. Usually, it would be evaluated continuously for about 14 years.

Details, including the amount of energy linked to the hydro project and potential reduction of greenhouse gas emissions, would have to be submitted.

North Korea has been mostly reluctant to share information about its energy generation activities.

According to the expert, North Korea has recently displayed “great interest” in the possibility of operating hydro-electric power stations to alleviate its domestic energy shortages and to acquire “carbon credits” that it could, in turn, sell on the international carbon market.

Hard currency

As North Korea’s economic crisis worsens, Pyongyang is seeking ways to earn hard currency following a failed currency reform and due to sanctions imposed by the international community over its nuclear and missile developments and provocations targeting South Korea.

The interest in the CDM is likely to be part of this search.

The North Korea expert also said that earning hard currency through “carbon credits” would not be subject to sanctions imposed on Pyongyang under UN Security Council resolutions, and that any North Korea’s application for participation under the CDM “may stand a chance.”

“For North Korea, this could be an opportunity to earn hard currency without engaging in illegal armament sales, while operating an electric power station in transparent fashion, and accepting strict monitoring by the UN, and abiding by applicable international standards.”

The United States has been pressing China to use its influence to persuade North Korea regime to end recent provocations and return to disarmament talks involving the three countries and South Korea, Russia and Japan.

The six-party nuclear talks were last held in 2008. The impoverished North has been seeking a restart to the nuclear negotiations, which propose to reward its gradual nuclear disarmament with phased infusions of economic aid.

In a bid to renew dialogue and ease chances of conflict, South Korea recently proposed holding a preliminary meeting with North Korea on Feb. 11 to prepare for high-level defense talks. On Friday, the North suggested parliamentary talks between the two sides.

Read the full story here:
North Korea Eyes Carbon Market
Radio Free Asia
1/29/2011

According to the China Daily:

China and the Democratic People’s Republic of Korea (DPRK) have agreed to share their experience and beef up cooperation in exploring and utilizing renewable energy.

The agreement was made during a meeting on Wednesday between senior Communist Party of China (CPC) official Zhou Yongkang and a delegation from the Korean Workers Party (KWP), led by Thae Jong Su, an alternate member of the KWP’s Political Bureau and member of the Secretariat.

Thae told Zhou that the main purpose of his current China trip is to learn from China’s experience in developing geothermal resources, as specified by the DPRK’s top leader, Kim Jong-il.

The DPRK hopes to use geothermal energy in its efforts to develop its economy and build a strong and prosperous country, Thae said.

Zhou, a member of the Standing Committee of the CPC Central Committee Political Bureau, told Thae that China would like to enhance its exchanges with the DPRK in the field in order to jointly improve their capability to develop and utilize renewable energy.

“I once worked in China’s oil industry for a long time, so I fully understood the importance of energy to a country,” said Zhou, who is also secretary of the Political Science and Law Committee of the CPC Central Committee.

Zhou served as vice minister of the Ministry of the Petroleum Industry from 1985 to 1988 and went on to work as deputy general manager of the China National Petroleum and Natural Gas Corporation from 1988 to 1996.

He said China has been actively promoting reforms in its energy sector during the country’s 12th Five-year Plan period (2011-2015).

Hailing the sound momentum of China-DPRK relations, Zhou recalled Kim’s successful visit to China earlier this year, during which Kim exchanged views with President Hu Jintao on major issues of common concern.

Kim also sent a congratulatory letter to Hu regarding the 90th anniversary of the CPC’s founding, Zhou said.

“We are glad to see that the two sides have engaged in high-level exchanges and substantial cooperation in various areas and made concerted efforts for common development and regional peace and stability,” he said.

Thae also conveyed greetings from Kim to Hu during the meeting.

The DPRK delegation is visiting China from July 5 to 9 at the invitation of the International Department of the CPC Central Committee.

Senior CPC official Liu Qi also met with the delegation later Wednesday afternoon.

Liu, a member of the Political Bureau of the CPC Central Committee and secretary of the Beijing Municipal Committee of the CPC, said China and the DPRK currently boast “frequent high-level visits, increasing strategic communication, deepening economic cooperation and active cultural exchanges.”

“China is ready to make joint efforts with the DPRK to implement the consensus reached by the two top leaders and further expand exchanges and cooperation in all areas,” Liu said.

Liu said that he hopes the people of the DPRK see continued progress in the country’s development under the leadership of Kim.

Liu also briefed Thae on Beijing’s economic and social development.

In response, Thae said the DPRK and China now enjoy prosperous ties, which have been carefully nurtured by the countries’ top leaders. The DPRK is willing to work with China to carry out practical cooperation and bolster relations to a new high, he added.

Read the full story here:
China, DPRK to boost renewable energy co-op
China Daily
2011-7-7

According to the Washington Post:

The founder of Pakistan’s nuclear bomb program asserts that the government of North Korea bribed top military officials in Islamabad to obtain access to sensitive nuclear technology in the late 1990s.

Abdul Qadeer Khan has made available documents that he says support his claim that he personally transferred more than $3 million in payments by North Korea to senior officers in the Pakistani military, which he says subsequently approved his sharing of technical know-how and equipment with North Korean scientists.

Khan also has released what he says is a copy of a North Korean official’s 1998 letter to him, written in English, that spells out details of the clandestine deal.

Some Western intelligence officials and other experts have said that they think the letter is authentic and that it offers confirmation of a transaction they have long suspected but could never prove. Pakistani officials, including those named as recipients of the cash, have called the letter a fake. Khan, whom some in his country have hailed as a national hero, is at odds with many Pakistani officials, who have said he acted alone in selling nuclear secrets.

Nevertheless, if the letter is genuine, it would reveal a remarkable instance of corruption related to nuclear weapons. U.S. officials have worried for decades about the potential involvement of elements of Pakistan’s military in illicit nuclear proliferation, partly because terrorist groups in the region and governments of other countries are eager to acquire an atomic bomb or the capacity to build one.

Because the transactions in this episode would be directly known only to the participants, the assertions by Khan and the details in the letter could not be independently verified by The Washington Post. A previously undisclosed U.S. investigation of the corruption at the heart of the allegations — conducted before the letter became available — ended inconclusively six years ago, in part because the Pakistani government has barred official Western contact with Khan, U.S. officials said.

By all accounts, Pakistan’s confirmed shipments of centrifuges and sophisticated drawings helped North Korea develop the capacity to undertake a uranium-based route to making the bomb, in addition to its existing plutonium weapons. Late last year, North Korea let a group of U.S. experts see a uranium-enrichment facility and said it was operational.

The letter Khan released, which U.S. officials said they had not seen previously, is dated July 15, 1998, and marked “Secret.” “The 3 millions dollars have already been paid” to one Pakistani military official and “half a million dollars” and some jewelry had been given to a second official, says the letter, which carries the apparent signature of North Korean Workers’ Party Secretary Jon Byong Ho. The text also says: “Please give the agreed documents, components, etc. to . . . [a North Korean Embassy official in Pakistan] to be flown back when our plane returns after delivery of missile components.”

The North Korean government did not respond to requests for comment about the letter.

Jehangir Karamat, a former Pakistani military chief named as the recipient of the $3 million payment, said the letter is untrue. In an e-mail from Lahore, Karamat said that Khan, as part of his defense against allegations of personal responsibility for illicit nuclear proliferation, had tried “to shift blame on others.” Karamat said the letter’s allegations were “malicious with no truth in them whatsoever.”

The other official named in the letter, retired Lt. Gen. Zulfiqar Khan, called it “a fabrication.”

The Pakistani Embassy in Washington declined to comment officially. But a senior Pakistani official, who spoke on the condition of anonymity “to avoid offending” Khan’s supporters, said the letter “is clearly a fabrication. It is not on any official letterhead and bears no seal. . . . The reference to alleged payment and gifts to senior Pakistani military officers is ludicrous.”

There is, however, a Pakistani-Western divide on the letter, which was provided to The Post by former British journalist Simon Henderson, who The Post verified had obtained it from Khan. A U.S. intelligence official who tracks nuclear proliferation issues said it contains accurate details of sensitive matters known only to a handful of people in Pakistan, North Korea and the United States.

A senior U.S. official said separately that government experts concluded after examining a copy of the letter that the signature appears authentic and that the substance is “consistent with our knowledge” now of the same events. Both officials spoke on the condition of anonymity because of the diplomatic sensitivity of the allegation.

Olli Heinonen, a 27-year vet­eran of the International Atomic Energy Agency who led its investigation of Khan before moving to Harvard’s Kennedy School last year, said the letter is similar to other North Korean notes that he had seen or received. They typically lacked a letterhead, he said; moreover, he said he has previously heard similar accounts — originating from senior Pakistanis — of clandestine payments by North Korea to Pakistani military officials and government advisers.

The substance of the letter, Heinonen said, “makes a lot of sense,” given what is now known about the North Korean program.

Jon, now 84, the North Korean official whose signature appears on the letter, has long been a powerful member of North Korea’s national defense commission, in charge of military procurement. In August, the U.S. Treasury Department imposed financial sanctions on his department for its ballistic missile work.

According to Khan, in the 1990s, Jon met then-Pakistani President Farooq Leghari, toured the country’s nuclear laboratory and arranged for dozens of North Korean technicians to work there. Khan detailed the payments Jon allegedly arranged in written statements that Henderson, a senior fellow at the Washington Institute for Near East Policy, shared with The Post. Henderson said he acquired the letter and the statements from Khan in the years after his 2004 arrest by Pakistani authorities.

Henderson, who has written extensively about Khan, said he provided the letter to The Post because he lacked the resources to authenticate it himself.

He said the letter and the statements constitute new evidence that Khan’s proliferation involved more-senior Pakistani officials than Khan himself. Khan has been freed from home detention but remains under round-the-clock surveillance in a suburb of Islamabad, where the government has recently threatened him with new sanctions for illicit communications.

Some of Khan’s past statements have been called into question. Pakistani officials have publicly accused Khan — who is still highly regarded by many in his country — of exaggerating the extent of official approval he received for his nuclear-related exports to North Korea, Libya and Iran. In 2006, then-Pakistani President Pervez Musharraf accused Khan of profiting directly from nuclear-related commerce.

Although Khan “was not the only one who profited from the sale of Pakistan’s nuclear weapons technology and components . . . by Pakistani standards, his standard of living was lavish,” and the disclosure of his private bank account in Dubai, the United Arab Emirates — with millions of dollars in it — was highly suspicious, said Mark Fitzpatrick, an acting deputy assistant secretary of state for nonproliferation during the George W. Bush administration.

Khan says the bank account was used by associates and a charity he founded, and the Pakistani government never asked him to return any money. He said that in 2007 — six years after his formal retirement and complaints of financial hardship — Musharraf arranged for a lump-sum payment equivalent to $50,000 and a monthly pension of roughly $2,500, which Khan says “belied all those accusations and claims.”

Although U.S. officials disagreed for years about North Korea’s uranium-enrichment capability, the dispute was settled in November when the Pyongyang government invited Siegfried Hecker — a metallurgist who formerly directed a U.S. nuclear weapons laboratory — to see a newly renovated building at Yongbyon that housed more than 1,000 enrichment centrifuges.

Hecker said in an interview that although the government did not disclose their origins, their size, shape and stated efficiency were close to a centrifuge model, known as the P2, that Khan obtained illicitly from Europe. Khan has said that he helped give North Korea four such devices.

“The combination of the Pakistani design, the Pakistani training and the major [Pakistani] procurement network they had access to” allowed North Korea to “put the pieces together to make it work,” Hecker said.

According to Khan’s written account, the swap of North Korean cash for sensitive Pakistani technology arose during a squabble in 1996 over delays in Pakistan’s payment to North Korea for some medium-range missiles. U.S. officials said they had heard of this dispute.

In the letter, Jon first thanks Khan for his assistance to North Korea’s then-representative to Islamabad, Gen. Kang Tae Yun, in the aftermath of a bizarre shooting incident in which an assailant supposedly gunning for Kang accidentally killed his wife. But the heart of the letter concerns two key transactions: the provision of a kickback to speed the overdue Pakistani missile-related payments and additional payments for the nuclear-related materials.

Khan, in his written statements — including an 11-page narrative he prepared for Pakistani investigators while under house arrest in 2004 that was obtained by The Post — said the idea for the kickback came from a Pakistani military officer.

Khan said Kang responded by delivering a half-million dollars in cash in a suitcase to a top Pakistani general, who declined it. Khan said Karamat, a more senior officer at the time, then said: “I should arrange with Gen. Kang to pay this money to him for some secret [Pakistani] army funds. He would then sanction the payment of their outstanding charges.”

“I talked to Gen. Kang, and he gave me the $0.5 million in cash, which I personally delivered” to Karamat, Khan wrote. He says this payment only whetted the army’s appetite, however: Karamat, who had just become chief of the army staff, “said to me that he needed more money for the same secret funds and that I should talk to Gen. Kang.”

Kang then started bargaining, saying that his superiors “were willing to provide another $2.5 million, provided we helped them with the enrichment technology,” Khan wrote.

Once the details of that assistance were worked out, Khan wrote, “I personally gave the remaining $2.5 million to Gen. Karamat in cash at the Army House to make up the whole amount.” Khan said he transferred all the funds on two occasions in a small canvas bag and three cartons, in one case at the chief of army staff’s official residence.

On the top of one carton was some fruit, and below it was $500,000 in cash, Khan wrote in a narrative for Henderson. Inside the bag was $500,000, and each of the other two cartons held $1 million, Khan wrote.

If the account is correct, the ultimate destination of the funds in any event remains unclear. Pakistani officials said in interviews that they found no trace of the money in Karamat’s accounts after an investigation. But the military is known to have used secret accounts for various purposes, including clandestine operations against neighboring India in the disputed Kashmir region.

Karamat said that such a delivery would have been impossible and that he “was not in the loop to delay, withhold or sanction payments” to North Korea. He called the letter “quite mind-boggling.”

The letter also states that Zulfiqar Khan, Karamat’s colleague, received “half a million dollars and 3 diamond and ruby sets” to pave the way for nuclear-weapons-related transfers. Zulfiqar Khan, who later became the head of Pakistan’s national water and power company, was among those who had witnessed the country’s nuclear weapons test six weeks before the letter was written.

Asked to respond, he said in an e-mail that he considered the entire episode “a fabrication and figment of imagination,” and he noted that he had not been accused of “any sort of dishonesty or irregularity” during 37 years as a military officer. He denied having any connection to North Korean contracts.

The senior Pakistani official said that Karamat and Zulfiqar Khan were “amongst the first to initiate accountability” for Abdul Qadeer Khan and his colleagues, and that implicating them in illegal proliferation “can only be deemed as the vengeful reaction of a discredited individual.”

In the letter, Jon requests that “the agreed documents, components” be placed aboard a North Korean plane. He goes on to congratulate Khan on Pakistan’s successful nuclear test that year and wish him “good health, long life and success in your important work.”

The Pakistani intelligence service interrogated Karamat in 2004 about Khan’s allegations, according to a Pakistani government official, but made no public statement about what it learned. Musharraf, who oversaw that probe, appointed Karamat as ambassador to Washington 10 months later, prompting further scrutiny by the U.S. intelligence community of reports that Karamat had arranged the sale of nuclear gear for cash.

Those inquiries, several U.S. officials said, ended inconclusively at the time because of Karamat’s denial and Washington’s inability to question Khan.

The letter can be found here.

For those of you who are interested, here is the biography of Jon Byong-ho from the Yonhap  North Korea Handbook (p. 796):

Jeon Byeong-ho
Current Posts: secretary (in charge of munitions), Workers’ Party of Korea Central Committee (wpK CC)
Educ.: Anju Middle School, Pyeongyang; Ural Engineering College, USSR
Born: March 1926 (Musan, North Harngyeong Province)
Career:
security staff, Anju Security Guards, South Pyeongan Province, Aug. 1945
security squad for Kim II-sung’s House, Aug. 1945
studied at Ural Engineering College, USSR, just before the Korean War, 1950
engineer, chief engineer, manager, Ganggye Tractor Factory (Military Logistics Factory), Jagang Province, End of 1951
vicedirector, Machine Industry Dept. (originally Military Logistics Dept.), Oct. 1970
alternate member, WPK CC, Nov. 1970
director general, General Bureau of Second Economic Committee, 1972
member, WPK CC, Oct. 1980-
delegate, Seventh SPA, Feb. 1982
chairman, Second Economic Committee, March 1982
awarded Order of Kim II-sung, Apr. 1982
alternate member, Politburo, WPK CC, Aug. 1982
delegate, Eighth SPA, Nov. 1986
secretary (in charge of munitions), WPK CC, Dec. 1986
member, Politburo, WPK CC, Nov. 1988-
delegate (Geumbit, South Hamgyeong Province), Ninth Supreme People’s Assembly (SPA), Apr. 1990
member, Military Committee; director, Military Industry Policy Inspection Dept., May 1990-
director, Economic Policy Supervisory Dept., March 1994
member (11th), Kim Il-sung Funeral Committee, July 1994
awarded title of Labor Hero, Feb. 1998
member, Tenth SPA (254th electoral district), July 1998
member, Military Committee, Sept. 1998

He has since taken a post at the National Defense Commission and “been put out to pasture” (see here also).  According to another Washington Post article: “U.S. officials confirm that he long directed North Korea’s defense procurement and nuclear weapons efforts, putting him in a position to know about the events the letter depicts.”

The Guardian and Arms Control Wonk also covered this story.

Read the full story here:
Pakistan’s nuclear-bomb maker says North Korea paid bribes for know-how
Washington Post
R. Jeffrey Smith
2011-7-6

According to Yonhap:

North Korea began discharging water from a dam near the border earlier this week without notifying South Korea, officials here said Wednesday.

Officials here in this Gyeonggi Province town, north of Seoul, said the North earlier this week opened the Hwanggang Dam near the Imjin River, which flows out to South Korea’s west coast, and has kept it open since.

“No damage has been reported around the Imjin River,” an official said. “We’re not concerned about (the water level of the river) yet.”

Officials said the water level on the Pilseung Bridge near the border, which serves as a gauge of North Korea’s water discharge, reached 4.49 meters as of 8 a.m. Tuesday, well over the warning level of 3 meters, and then fell to 4.03 meters at 4:20 p.m. Wednesday before inching back up to 4.04 meters by 5 p.m.

Officials said it usually takes 10 hours for water from the Hwanggang Dam to reach the Pilseung Bridge.

After the North Korean discharge, South Korea opened its Gunnam Dam to control the water level. The dam, which began operations last July, was specifically designed to capture flash floods from North Korea.

North Korea was hit by Typhoon Meari this week, officials added, suggesting that a sudden rise of the water level there might have forced the discharge.

It is the same dam that North Korea opened without prior notice in September 2009. The ensuing flash flood claimed six South Korean lives. At a later inter-Korean meeting on flood control, North Korea expressed regret over the incident and vowed to give prior notice before future discharges.

Last year, North Korea also sent water from the Hwanggang Dam and did notify officials here through the military communication line. The water near the Pilseung Bridge rose to 8.67 meters, but the Gunnam Dam helped prevent damage along the Imjin River.

An official said the local authorities were remaining on guard.

“The water level can surge suddenly,” a local official said. “In 2009, when six South Koreans were killed, the level on the Pilseung Bridge was 4.69 meters. So we’re closely monitoring the situation.”

Additional Information:
1. The South Korean government has also warned its people to be on the lookout for land mines that wash downstream from the DPRK.  See here and here.

2. Read about the 2009 Hwanggang Dam incident here.

3. Here is an older satellite image of the dam (Google Maps).

Imports from North Korea: Existing Rules,Implications of the KORUS FTA, and the Kaesong Industrial Complex
Mark E. Manyin, Coordinator, Jeanne J. Grimmett, Vivian C. Jones, Dick K. Nanto, Michaela D. Platzer, Dianne E. Rennack
Congressional Research Service (CRS)
June 2, 2011

Download the PDF here.  This publication has been added to the list of previous CRS reports on the DPRK here.

________

Trade with China 1995-2009
Nathaniel Aden
Nautilus Institute
June 7, 2011

View the paper here.  A link to this paper has been added to the DPRK Economic Statistics Page. The Nautilus Insitute has also posted links to some very interesting presentations from the 2010 DPRK Energy and Minerals Working Group.

________

[Book] The Contemporary North Korean Politics: History, Ideology, and Power System (현대 북한의 정치: 역사, 이념, 권력체계)
Jong Song-Jang (정성장)
More information TBA, but see here and here (Korean).

________

[Book] Architekturführer Pjöngjang (German: Pyongyang Architecture Guide)
Philipp Meuser
Order here at Amazon. More here and here.

According to the Korea Herald (h/t L.P.):

A number of economic cooperation projects appear ready to take shape between North Korea and China.

A businessman here claimed the North and China have signed a more concrete agreement last year following up on a 2005 preliminary deal to jointly develop an offshore oil field.

“The North has agreed with China to jointly develop an offshore oil field in the waters off Nampo,” a western coastal town, said Kim Young-il, chief executive of a South Korean trading firm and inter-Korean trade adviser to the Korea International Trade Association.

“The North Korea-China agreement on joint development of the oil field seems to have taken place last year.”

It is estimated that some 20 billion tons of crude oil is buried under the Bohai Gulf continental shelf which stretches across the Korea Bay between the North Pyongan Province and China’s Liaoning Province, Kim said during a policy debate session hosted by a legislator.

“The joint exploration would be economically viable because, once about a third of the oil reserve can be extracted, they can extract between 7 and 8 billion tons, enough to meet China’s entire demand for nearly 30 years,” Kim said.

Read the full story here:
Communist allies seek strategic interests
Korea Herald
Kim So-hyun
2011-6-1

Institute for Far Eastern Studies (IFES)
NK Brief 2011-6-13

Kim Jong Il has made four official appearances from May 28 to June 3 since his last visit to China, starting with industrial facility inspections. This could be construed as North Korea’s attempt to highlight current facility-building projects and the superiority of its leadership in improving the people’s economy, and to rally the North Korean people.

Kim commemorated his recent unofficial visit to China by attending a celebratory performance. In a speech, he commented on the outcome of the visit and encouraged solidarity and morale building of its people.

On his return from China, Kim provided field guidance at the construction site of Huichon Power Plant. He called for the early completion of the plant as an essential step in resolving North Korea’s chronic power shortage. Specifically, Kim commented, “Resolving the power shortage is the major task in order to build a strong and prosperous nation . . . . appropriate units must ensure timely production of facilities, equipments and materials.” Kim is reported to have visited the construction site of Huichon on five occasions from September 2009 to December of last year.

In addition, Kim visited a fish breeding institute and Kosan Fruit Farm, encouraging the pursuit of technology development projects through modernization and scientific advancement.

At the fish breeding institute, Kim called for the improvement of the ecological environment of the fishery and for the increase in fish production by constructing more fish farms and by advancing the facility in a way that meets the demands of industrialization and modernization.

Similarly at the Kosan Fruit Farm (located in the Gangwon Province), production was stressed once again as an important task. Kim called for the improvement in fruit production through modernization and the integration of science and technology. This was Kim’s third visit to the farm since 2008.

Kim’s official visits this year are slightly fewer in number compared with the same period of time last year: from 70 visits in 2010 (19 military-related, 29 economic-related, 6 foreign-related, 13 other activities), to 60 visits in 2011 (13 military-related, 28 economic-related, 6 foreign-related, 13 other activities) in 2011.

All major DPRK news outlets covered Kim’s recent visit to China. The Politburo of the Workers’ Party of Korea Central Committee organized a meeting calling for the strengthening of DPRK-China relations. Likewise, the Presidium of the Supreme People’s Assembly praised the current DPRK-China economic cooperation activities and growing friendship between the two nations.

Institute for Far Eastern Studies (IFES)
2011.05.26

On May 23, the DPRK released the “Outline of DPRK-China Joint Development Plan for Rason and Hwanggumpyong Economic and Trade Zone” consisting of detailed blueprint of two countries’ recent bilateral joint development deal.

According to Yonhap News, China and North Korea are planning to turn the Rason and Hwanggumpyong areas into a comprehensive industrial complex of tourism and manufacturing producing automobiles, mobile phones, agricultural and chemical products.

In addition, the Law on Rason Economic and Trade Zone and the Special Law on Hwanggumpyong Zone will adopt market economy principles which will permit foreign bank investments and independent contracts between corporations and workers. Although the development plans are not definite yet, it is significant since it hints at North Korea’s shifting position on opening up and economic development.

The bilateral development plan between Pyongyang and Beijing will stretch from Rajin, Sonbong, Ungsang, to Gulpo areas.

In the Rajin area, four major industrial complexes will be constructed consisting of storage, logistics and distribution centers, state of the art technology, and equipment, clothing and food manufacturing. In the Ungsang area, comprehensive a wood processing complex will be built while in the Gulpo area, a high-efficiency agriculture zone will be constructed. In the Sonbong area, truck manufacturing factories will be built along with other metal producing factories. In Rajin, docks will be built for ship building and maintenance.

There are also plans of developing the Rason area into an international tourism zone. There are immediate plans to build basic tourism infrastructure such as hotels, resorts, and roads for sightseeing. The long-term goal is to build a grand Northeast Asia tour course, which will include Yanbian of China; Rason, Chongjin, Mount Chilbo and Mount Kumgang of North Korea; Vladivostok and Sakhalin of Russia; Sapporo and Nakata of Japan; and Sokcho and Busan of South Korea.

As for the Hwanggumpyong area, four major industrial complexes will be established: one each for information, tourism and culture, modern protected agriculture, and food processing. More specifically, Hwanggumpyong will connect information between Hwanggumpyong and the border city of Dandong in China. In addition, culture and tourism will be developed through promotion of Arirang and other cultural performances and exhibitions.

As for the high-efficiency agriculture zone, a modern agriculture technology research center will be established and China-DPRK joint markets will be set up to serve as a central commerce center.

To assist with the industrial development in the area, land and sea routes will be developed where roads and railroads will be built and Rajin will be upgraded to a comprehensive and multi-purpose port.

There are additional plans of constructing a coal power station to replace the current thermoelectric power plant in Sonbong. There is also discussion of possibly developing other alternative energy plants, such as wind and solar. There are also plans of building basic facilities of mobile telecommunication to promote international communication.

Hwanggumpyong is an island on the Yalu River and the new developments in building ports and roads along with distribution network, Internet, and mobile telecommunication will become a link connecting North Korea with China.

Pyongyang is pursuing development through multiple cooperation channels. It has plans of establishing three-tiered cooperative system with joint management committee, joint development management committee and investment development corporation with Beijing. These committees will be responsible for amending and negotiating any issues that may arise during the process of development and supervise various areas of investments, enterprises, and environment and as well as inspect land and commerce development and basic facility operations.

Both Pyongyang and Beijing will attract foreign investments through market-based tax and financial policies in the Rason and Hwanggumpyong zones. Specifically, tax refund policy will be implemented and tariffs will be lifted from any imported equipment and materials necessary for production. The foreign investment companies will be allowed to choose their own banks or even establish financial institutions to assist in their business management.

In addition, workers and companies will be permitted to sign their own labor contracts. The companies will be granted autonomy in hiring and firing, pricing, bankruptcy, liquidation and other business practices based on market principles.

As for investment protection policy, foreign investors will be permitted to transfer or inherit profits and assets and foreign investor’s investments and assets will not be collected as national property by North Korea.

Pictured above (Google Earth): Pukchang Thermal Power Plant (북창화력발전련합기업소)

According to the Daily NK:

A source from Pyongyang reported the latest on the 14th, saying, “From April the electricity situation got a bit better, so now between 8 in the morning and 5 in the afternoon the electricity goes on and off repeatedly.”

But, the source added, “Between 10 at night and 5 in the morning, it is provided stably.”

According to the source, in the winter period from January to March, electricity was only supplied at all between midnight and 4 or 5 in the morning.

Residential areas of the city receive their electricity mostly at night because factories and official buildings are prioritized during daylight hours.

However, if, for instance, from 8 A.M. to 12 P.M. electricity goes to a shoe factory, and then from 12 P.M. to 5 P.M. it goes to a fabric factory, people in the neighborhood of those factories might be able to charge batteries or watch DVDs during that time.

However, outside the capital things are worse, as usual. In the case of Nampo on the West Sea coast, there is almost no daytime electricity supply at all. According to a source from the city, “In general there is no electricity. It comes around two days in ten, but even at those times it doesn’t usually work for longer than two hours.”

“The electricity situation is getting worse, and people say this is because electricity generated at Bukchang [Pukchang, 북창] Power Plant is all sent to Gangsun Steel Mill,” the source added.

Hyesan in Yangkang Province is in much the same boat. When Kim Jong Il conducted an onsite inspection at Hyesan Youth Mine in April the authorities provided the area with electricity, but now it never comes.

A Hyesan source explained, “They send electricity for 24 hours on Kim Il Sung and Kim Jong Il’s birthdays, but this year it was unstable even then. When May came, they started to give us electricity from 6 to 10 in the evening, but it is unstable so for houses with no transformer this electricity is useless.”

The source from Nampo reported that some wealthier people apparently used to get electricity by offering money to local factories, approximately 15,000 won per month, but that this avenue has also been closed off.

The practice stopped when a decree was handed down stating, “Those who use stolen electricity will be exiled.”

There is also the ongoing problem of copper theft, the Nampo source revealed, explaining, “Before April 15th this year, electrical cables were stolen from Nampo Samcheon-ri Chosun-China Joint Factory (a clothing factory), so for five days the factory couldn’t operate. The workers chipped in with around 300 to 500 won each from their wages to purchase cables so that electricity could come again.”

Since electricity does not flow in most cables continually, it is easy to sever them to obtain the saleable copper inside. This copper, which is relatively expensive, is then sold to smugglers who sell it in China.

The “Gangsun Steel Mill” (Kangson Steel Mill) is now the “Chollima Steel Mill” and it was home to the Chollima Movement (learn more here).  It is true that the DPRK has been recently emphasizing steel production (via recycling of scrap), but it is strange that people would literally think it is draining all the power from the Pukchang Thermal Power Plant since the two facilities are not directly connected on the power grid (or even close to each other).  It is pretty obvious from Google Earth imagery that the steel mill receives its power from the Pyongyang and East Pyongyang Thermal Power Plants.  It could be that the reference to the “Kangson Steel Mill” (which is itself interesting since the factory has not gone by that name in years) is a generic reference to the state’s prioritization of heavy industry over houshold electricity use.

Read the full story here:
Electricity Supplies Showing No Big Improvement
Daily NK
Lee Beom Ki and Jeong Jae Sung
2011-5-16