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Indonesia considers hydro

Indonesia is examining the possibility of a project that would use low cost hydro power to produce aluminium, steel, copper, nickel and possibly petrochemicals. The project would be located on the remote and sparsely populated northern coast of Irian Jaya in eastern Indonesia.

The Mamberamo river, which is 650km long would support 20GW of installed capacity. Of this, the project would use only 5.6GW initially to produce power at around 2US cents/kWh. The power plant would have an IPP build-own-operate (BOO) commercial structure, with minority Indonesian government equity to accommodate its expected US$5-7B development costs.

The project’s chief stumbling block is that much of the 100,000km2, high rainfall, densely forested Mamberamo river catchment area on which it would depend, falls within the adjoining Mamberamo-Foya mountains and Rouffaer river reserved areas. The first of these extends right to the Mamberamo river mouth at Cape D’Urville.

However, the Indonesian government is optimistic that the project will be a potential magnet for resettlement from densely populated Java and Sumatra. Tens of thousands of people could find work in building and operating the power plant, factories, ports, airfields, roads and towns.