South Korea will build a 120-megawatt data center with an investment of 1.5 trillion won ($1.12 billion) in Pohang, North Gyeongsang Province by 2027, the Ministry of Trade, Industry and Energy said Friday.

According to the ministry, SK Ecoplant, DCT Telecom and KB Asset Management signed a memorandum of understanding to invest the 1.5 trillion won to build the global data center campus as well as the related undersea fiber-optic cables and a landing station that serves as a connection between the undersea cables and ground communications network.

The plan is to build four 30-megawatt data center buildings on the campus by 2027. The local governments of North Gyeongsang Province and Pohang will offer subsidies for the project.

SK Ecoplant will take part in building the data center campus and operating a joint venture. DCT will be in charge of the landing station and undersea fiber-optic cables and KB Asset Management will take care of investment through a digital infrastructure fund.

The Pohang data center project is in line with the Korean government’s encouragement of building data centers outside Seoul and Gyeonggi Province to disperse the usage of electricity. Currently, about 60 percent of all data centers are located in Seoul and Gyeonggi Province.

According to SK Ecoplant, the Pohang site will introduce the business model of linking a data center with a landing station for the first time in Korea. Leading digital countries such as the United States, Singapore and Japan have already been employing this model.

The Pohang data center’s landing station will be directly connected to the landing station of Japan’s Fukuoka, with plans to connect to other landing stations in the US and Europe in the future, giving an edge for Korea to draw in global big data firms.

With this project, SK Ecoplant said it will look to expand its business to digital infrastructure development.

“As the No. 1 fuel cell operator in Korea last year, we will actively participate in the government's efforts by using all of our capabilities as a data center developer and contribute to energy distribution,” said SK Ecoplant CEO Park Kyung-il.

“We will do our best to help the Pohang data center campus to become a global digital infrastructure model beyond Korea.”