China and Indonesia set up $18bn hydro plan to power Borneo

China and Indonesia set up $18bn hydro plan to power Borneo

Power Construction Corporation of China (PowerChina) has signed a memorandum of understanding (MoU) with PT Indonesia Kayan Hydropower Energy to jointly build hydropower plants with a total investment of US$17.8 billion on the Kayan River in North Kalimantan.

Under the MoU signed in Beijing last Friday, the two firms will develop five hydropower facilities with a total electricity generation capacity of 9,000 megawatts.

“PowerChina began studying hydropower resources of the Kayan River in 2008 and completed the development plan for the whole basin of the river as well as the feasibility study and preliminary design of the first hydropower plant in 2013,” Guo Xiaodan, the representative of Sinohydro Corporation, PowerChina’s subsidiary engaged in hydropower plant construction, said in a statement on Monday.

Xiaodan expects the hydropower project to create significant multiplier effects in the economy of North Kalimantan, which is known for abundant natural resources.

According to the North Kalimantan administration, the province has a hydroelectricity potential amounting to around 33,000 MW.

Since entering the Indonesian market in 1995, PowerChina, a state-owned company, has developed infrastructure projects totaling around $2.4 billion in Indonesia.

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