The government is ready to build a hydroelectric power plant in Maung Banjar Negara, Central Java - Photo: Special.

JAKARTA (TheInsiderStories) – The government is ready to build a hydroelectric power plant in Maung Banjar Negara, Central Java after received an investment injection of US$650 million from South Korea’s power generation industry, Korea Southern Power Co., Ltd. (KOSPO), the country’s investment coordinating board said on Friday (01/17). The project is expected to drive the government’s interest in supplying electricity through green energy by 23 percent.

The project is under the auspices of PT Indonesia Power and PT Nindya Karya after the two companies signed a memorandum of understanding (MoU) on Friday. The construction of the project will take approximately four years with an investment of around Rp10 trillion ($714.28 million). Nindya Karya is expected to build the dam in two years followed by the plant construction by Indonesia Power.

“Hopefully after the MoU, the investment will start immediately and will not stall again. If you encounter any obstacles in the realization, please report to us immediately, so it can be realized quickly next month,” said the head of investment coordinating board Bahlil Lahadalia, adding his party picked up the investor’s ball up to South Korea last year to get investment from KOSPO.

Lahadalia conveyed the government’s reason to support investment in the project because the construction of the power plant is based on green energy so that it can economize the use of fossil fuels. The power plant, which is planned to produce 230 megawatts of electricity, is aimed to meet the new and renewable energy mix by 23 percent until 2027. In addition, this hydropower plant also aims to reduce sedimentation in the Mrica Reservoir, dam of the Serayu River, with an installed capacity of 180 megawatts.

Maung’s hydropower development plan has begun since the feasibility study was conducted by state-owned electricity firm PT Perusahaan Listrik Negara (PLN) in the 1980s. In 2012, PLN assigned Indonesia Power to carry out the plant construction. However, the construction has stalled due to a lack of clarity in funding.

Investment in Maung hydroelectric power has been through Online Single Submission (OSS), Lahadalia noted. This is considered to facilitate KOSPO investment as regulations at the ministries are already in a permit form in accordance with presidential instruction number 7 of 2019 concerning the acceleration of ease business.

The investment is expected to contribute to this year’s realization target of Rp866 trillion, Lahadalia said. To achieve it, the government will open investment opportunities for the United States, South Korea, Japan for investment in the Natuna waters, he adds.

US$1=Rp14,000

Written by Lexy Nantu, Email: lexy@theinsiderstories.com