"Indonesia’s huge China-backed ‘green’ industrial estate raises deforestation, environment fears" 8 January 2022

• President Joko Widodo says the US$132 billion manufacturing hub being built in North Kalimantan represents a ‘leap in Indonesia’s economic transformation’
• But activists fear the massive hydropower project being built to power it will cause deforestation, and destroy local villagers’ homes and livelihoods

When Indonesian President Joko Widodo officiated the groundbreaking ceremony last month on what has been touted as the world’s largest green industrial estate, he said it would spur the country’s “economic transformation” from raw material exporter to a significant player in the global supply chain.

But concerns have been raised about the China-backed project’s green credentials, as rainforest will have to be cut down and biodiversity threatened to build the five hydroelectric dams that are required to power it. Hundreds of villagers’ homes and livelihoods are also under threat, according to activists. [...]

The five dams – developed by the Power Construction Corporation of China and PT Kayan Hydro Energy for a total cost of US$18 billion as part of Beijing’s Belt and Road Initiative to grow global trade – are already under construction on the Kayan River, some 200km away from Tanah Kuning, the coastal area where the industrial estate is being built. Once fully operational, the dams are expected to have a generating capacity of nine gigawatts, and the first is slated to come online in 2025. Solar energy and natural gas will also be used to power the industrial estate, the government has said. [...]

Kevin O’Rourke, analyst and author of the Reformasi Weekly newsletter on Indonesia’s politics and economy for foreign investors, said “the use of hydro power is invariably controversial, as its impact on local ecosystems can be severe”. [...]

Yohana Tiko, director of the Indonesian Forum for the Environment’s East Kalimantan branch, said the massive hydropower project on the Kayan River will submerge the villages of Long Lejuh and Long Peleban, and force at least 160 households to relocate.

“The villagers are at risk of losing their cultural identity,” she said. “And it’s not impossible that they will be relocated to non-productive land, which could lead to an exodus [from the area to other parts of the country].” [...]