"Indonesia backs hydro to power new capital city" 6 April 2023

Construction is pushing ahead on a series of Chinese-backed dams that are set to form Southeast Asia’s largest hydroelectric project, and which will power Indonesia’s new capital city, Nusantara.

But as work proceeds on the Kayan Cascade project – located in the North Kalimantan province of Borneo Island – controversies remain over permits and potential displacement of nearby communities. [...]

But the planned city and accompanying infrastructure have not been free of controversy. In a statement in October 2022, Jokowi claimed that 80% of Nusantara’s energy will come from renewable sources – including solar, wind, and hydropower from the Kayan Cascade.

Amid this ambitious target, civil society groups and local communities are still seeking clarity and assurances over the environmental impacts and displacements that the Kayan project could cause. [...]

The Kayan hydropower plant is included in the plan. Developed by Kayan Hydro Energy (KHE), a company affiliated to Chinese state-owned enterprise PowerChina, the US$17 billion project is designed to consist of five dams with a total capacity of 9 gigawatts. On completion it could become the largest hydroelectric power plant in Southeast Asia.

PowerChina signed an agreement with KHE in 2018 to develop the project, which is located in the Peso district of North Kalimantan. The Chinese company had reportedly begun to study the Kayan River as far back as 2008, and completed the planning, feasibility study and preliminary design of Kayan River I Hydro Power Plant in 2013. Upon agreement, it was launched under the banner of the Belt and Road Initiative, China’s global infrastructure development strategy. [...]

Potential impacts on Indigenous people and the environment

The Kayan project will directly affect at least two villages in Peso, a remote rural area through which the Kayan River flows. Initially, promises had been made by KHE to residents of Long Lejuh, a village of 414 people, and Long Pelban, home to 261. The villagers, who are Dayak Kenyah Indigenous peoples, were told they would be relocated and that a new residential area would be built like a small town. However, they say there has been no further discussion.

Santoso, the head of Long Pelban, said that KHE promised to relocate the two villages to these areas, each with an area of 600 hectares and in a predetermined location. He explained that these were to include residential areas, as well as agricultural land and community plantations. “But, so far all of that is like a dream,” Santoso said, adding that the plan has been discussed since 2012. [...]

Yohana Tiko, director of the East Kalimantan chapter of the Indonesian Forum for the Environment (WALHI), said the construction of the hydropower mega-project would also have significant negative effects on the environment, affecting the survival of local communities up- and downstream.

“For the environment, the threat is clear due to disruption of the hydrological function of the Kayan River and its tributaries, both in terms of ecosystems, biodiversity, loss of forest wetlands, agriculture, and fisheries both upstream and downstream of the river that cannot be restored,” Tiko said.

Doni Tatiana of the Yayasan Pionir (Pioneer Foundation), a local development organisation based in North Kalimantan, told China Dialogue that while only Long Lejuh and Long Pelban will be submerged by the dam’s reservoir, the project’s environmental impact assessment, known as an AMDAL, also includes impacts on a further four villages. These include less severe inundations of land and impacts on sites of ancestral heritage and cultural significance. [...]