Two Chinese companies — China Power Investment Corporation and Anhui Conch Cement — will invest $17 billion in dams in North Kalimantan, Indonesia’s newest province located on the island of Borneo, reports the Jakarta Globe.
The Indonesian government granted permission for the project on the Tayan River late last month. Indonesia’s Energy and Mineral Resources Minister Jero Wacik said the first phase of the project will break ground next year.
“Construction for the first phase will be completed in one-and-a-half years,” Jero was quoted as saying. “By 2015, the power plant will generate 700 megawatts of electricity.”
When complete, the project will have a capacity of 7,000 megawatts from hydropower plants. It will sell electricity to the state utility at a rate of 24 cents per kilowatt-hour, considerably higher than the 4 to 9 cents per kilowatt-hour set for coal-fired power. The higher price is part of a government program to encourage renewable energy production.
The minister said that China Power may seek permission to build a bauxite smelter.
The dam still requires a feasibility and environmental assessment impact study before it can proceed according to Jero.
Dams in neighboring Sarawak, a Malaysian state, have faced still resistance from human rights NGOs and environmental groups for their potential impact on indigenous tribes and the rainforest environment. At present it's unclear whether the China-backed project will face similar opposition. As a new province, North Kalimantan is eager for new investment. It has the highest proportion of forest cover of any province in Indonesian Borneo.