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Kayan hydropower gets major boost after signing deal with China firms

Kayan Hydropower plant masterplan (image: special)

JAKARTA (RambuEnergy.com) – After years of planning, discussions and lobbying, PT Kayan Hydro Energy (KHE) finally signed a memorandum of understanding (MoU) Synchro Corporation Ltd to develop 6,600 Megawatt (MW) hydropower plant at Kayan River (PLTA Kayan) in North Kalimantan province with a planned investment of US$17.8 billion.

Both parties have agreed to set up a joint venture to realize the project.

In addition to the MoU, a number of Indonesian companies also signed MoUs with their Chinese counterparts to develop joint projects. The Indonesian companies that signed the MoUs are PT Dragon Land, PT Kayan Energy Lestari, PT Kayan Hidro Power Nusantara, PT Wijaya Karya and others.

While Chinese companies that signed the MoUs are Gezhouba Group through PT Gezhouba Kaltara, China Gold, Sinopec, PT Han Energy, China Power, PT Chona Three Gorges and few others.

The signing of the MoUs in Beijing was witnessed by the Coordinating Minister for the Maritime Affairs Luhut Binsar Panjaitan, the Head of Indonesia’s National Investment Coordinating Board as well as ministries officials from both countries.

The Kayan hydropower plant has a potential capacity of 11,000 MW. However, the developer will develop 900 MW of installed capacity in the first phase and then will gradually increase its capacity to 6,600 MW depending on the demand.

The first phase development of the power plant is expected to be completed within 4-5 years.

The total cost to develop the hydropower plant, located in Peso sub-district, Bulungan Regency, North Kalimantan province is estimated to reach US$17.8 billion. The Chinese investors have said they are willing to provide the funds needed.

North Kalimantan Governor Irianto Lambrie said in Beijing on Sunday that the signing of the deal was facilitated by the Coordinating Minister for Maritime Affairs Luhut Panjaitan. “Thank God, this is a good news for all of us, especially the people in North Kalimantan,” he said.

The Chinese and Indonesian companies involving in the project will set up a joint venture, similar to the Jakarta-Bandung high-speed train project.

Site Manager of PT Kayan Hydro Energi (KHE) Abdul Aziz told local media in North Kalimantan that the total land required to develop the first phase of the project would reach 115 hectares. While the land needed for the second phase of the project would be 150 hectares.

The hydropower plant is developed to support the government’s plan to speed up development in the northern Kalimantan region.

The hydropower plant is expected to help keep up with Indonesia’s increasing demand for energy, which is expected to rise by about 10 percent annually.

The electricity from the hydropower plant will be supplied to North Kalimantan region, which often suffers power shortage, including the Industrial Zone and International Port (KIPI) in Tanah Kuning village, Tanjung Palas Timur, Bulungan. (*)

Written by Staff Writer, edited by Roffie Kurniawan  (email: roffie.kurniawan@gmail.com)

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