China Gezhouba Group Corp., (CGGC) just inked a massive RMB11.52 billion (US$1.62 billion) hydropower project in Indonesia, said the company last May - Photo by the Company

JAKARTA (TheInsiderStories) – China Gezhouba Group Corp., (CGGC) just inked a massive RMB11.52 billion (US$1.62 billion) hydropower project in Indonesia, said the company last May. The project part of Belt and Road Initiative (BRI) and proactive connection with Indonesia’ Global Ocean Support Point strategy, injecting new impetus into China and Indonesia’ investment and construction in key areas such as infrastructure.

CGGC partnering with Indonesia Dafeng Heshun Energy Industry Co., Ltd., to run the the Data Dian hydropower project phase I in North Kalimantan owned by PT Indonesia Dafeng Heshun Energy Industri. The project is expected to further increase the company’ presence in Southeast Asia, possibly leading to additional projects further down the road.

The installed capacity of the power plant is 1,200 megawatt (MW) and the average annual power generation is 7770 GWh. CGGC chairman, Chen Xiaohua, mentioned that the project should allow Indonesia to better tap into its abundant hydropower assets in the Kalimantan region and provide power supply for the construction of industrial parks with advanced metal smelting as the leading industry in such areas as Tanjung Selor.

Indonesia is aiming to transform its North Kalimantan province into the country’ energy and mining portal. While, China currently considers Indonesia as a key partner in promoting its Belt and Road Initiative.

For this reason, the country is prepared to make significant investments in the country through various collaborative projects and partnerships. CGGC had mentioned that its looking forward to participating in additional big-ticket projects in the country, including the construction of key facilities such as thermal power plants, highways, industrial parks, and ports.

On July, 2019, both countries agreed to prepare special funds in the Belt and Road Initiative project as a result of bilateral meetings between the two leaders, President Joko Widodo, and President Xi Jinping, on the sidelines of the G-20 Summit in Osaka, Japan.

In the meeting, Widodo took the initiative to submit a special funding request after offering Chinese projects worth of $91 billion. Indonesia has not been among the biggest beneficiaries of China’ trillion-dollar push to create a modern-day Silk Road.

Southeast Asia’s largest economy says this is because it has insisted any loan within the BRI framework is done on a business-to-business basis to avoid exposing the government in case of default.

The most high-profile BRI venture in Indonesia is a $6 billion high-speed rail project connecting Jakarta to Bandung, awarded to a consortium of Chinese and Indonesian state firms in 2015. But, the project has faced land ownership issues.

Another project is a $1.5 billion hydropower plant, funded by Chinese banks and being built by the Chinese state firm Sinohydro, in the heart of the Batang Toru rainforest on the island of Sumatra. As one of the important players and maritime centers within the framework of BRI, Indonesia has developed relations and cooperation with China.

The increase in bilateral relations also helped strengthen China’ partnership with the Association of Southeast Asian Nations. Indonesia and China have signed 23 memoranda of understandings on investment and trade cooperation.

The cooperation contract includes the development of four economic corridors, rapid train research and technology cooperation, and the development of research of education.

US$1: RMB7.10

Written by Staff Editor, Email: theinsiderstories@gmail.com