Indonesian President Joko “Jokowi” Widodo broke ground Wednesday on a major hydroelectric project that will power a sprawling China-backed industrial estate on Borneo island.
The project in North Kalimantan province, estimated to cost U.S.$2.6 billion and have a capacity of 925 megawatts, is being built by PT Kayan Hydropower Nusantara, a joint venture between Indonesia’s PT Kayan Patria Pratama (KPP) Group and Sarawak Energy Berhad, a Malaysian firm.
“I am very, very, very happy today because the construction of the Mentarang Induk Hydropower Plant has begun,” Jokowi said at the groundbreaking ceremony, according to a statement released by his office.
“And what makes me even happier is that this is being done by a consortium of Indonesia and Malaysia, showing that we as fellow Malays can truly work together well.”
Elsewhere in the Indonesian section of Borneo, construction is already underway on the Kayan River for a separate 9,000 MW hydroelectric plant, a joint venture between PT Kayan Hydro Energy, a local affiliate of the Power Construction Corp. of China, and Japan’s Sumitomo Corporation. That $17.8 billion hydropower project began in 2019 and consists of the construction of five dams.
Together, the two power plants will provide electricity to what Jokowi called the world’s largest industrial zone, the Kalimantan Industrial Park Indonesia (KIPI) in Bulungan regency. Construction on the park began in December 2021 and is expected to take five to 10 years to complete.
The $132 billion estate is being built with investments from China and the United Arab Emirates.
When finished the 30,000-hectare (116-square-mile) industrial zone in North Kalimantan will be about as big as Malta. The project is being touted as a future manufacturing hub for solar panels, batteries for electric cars, industrial silicon, and other products. Jokowi has said the project would enable Indonesia’s economy to “leapfrog” onto the global stage.
On Tuesday, Jokowi toured the sprawling industrial park, on the first day of his working visit to North Kalimantan. He expressed confidence that it would produce green products that could compete globally and boost Indonesia’s economic growth.
“With competitive advantages like this, green energy and green products, the Kalimantan Industrial Park Indonesia will become a major contributor to Indonesia’s future,” he said.
“The future of Indonesia is here. If this is done properly, everyone will come here, every industry that is related to green products will come to this area.”
The president said he would closely monitor the progress of the park’s development and ensure that it meets its deadlines.
“From what I see on the ground and after asking around, there seem to be no problems,” Jokowi said.
Environmentalists have expressed concerns that the power plants will threaten Borneo’s pristine forests and ecosystem. The Kayan River runs through the northern part of Kalimantan, the name for the Indonesian region of Borneo, where vast swaths of forest have been cleared for logging, mining, and the cultivation of palm oil.
Indonesia, Southeast Asia’s largest and most populous country, is the world’s eighth most polluting one with 2% of global greenhouse-gas emissions to its name, according to the World Resources Institute.
China is funding projects in Indonesia as part of its ambitious Belt and Road Initiative, a worldwide infrastructure-building program. These include the $6 billion Jakarta-Bandung high-speed rail project, which is expected to be completed by July this year.
President camps out
Jokowi’s visit to Borneo was his second to the region in recent days.
Last week in East Kalimantan province, Jokowi spent a night in a cabin in an area where Indonesia's new capital, Nusantara, is to be built.
“Tonight, the First Lady and I are staying at the location that will become the seat of government in the Nusantara capital city,” Jokowi tweeted last Thursday, posting a photo of himself sitting in front of a semi-permanent house.
Last year, the president and his wife Iriana camped in the same location.
In August 2019, Jokowi announced that the country would move the capital from crowded and partially sinking Jakarta, on Java Island, to East Kalimantan, a densely forested and thinly populated province in Borneo.
The government has struggled to attract investment for its construction since Japanese tech conglomerate Softbank last year withdrew its plans to invest.
In December, Investment Minister Bahlil Lahadalia said Softbank withdrew because the Indonesian government deemed that its proposal was unfair.