The first coal-fired power project led by a Chinese private company kicked off construction on Monday in Indonesia's West Kalimantan province.
Kalbar-1 power station, a cooperation project between Indonesia Power, a subsidiary of Indonesian power utility Perusahaan Listrik Negara and China's Suzhou-based private company Golden Concord Holdings Ltd, is expected to reach an installed capacity of 200 megawatts when put into operation in 2020, GCL said on Wednesday.
GCL is the first private Chinese company to sign a power-purchase agreement with Indonesia, which is plagued by endemic electricity shortages.
Analysts said China and Indonesia are highly complementary and with many Chinese descendants in Indonesia, it is relatively easy for Chinese enterprises to invest in the country.
"As an important infrastructure project, Kalbar-1 not only will offer much-needed electricity to Indonesia, but also can create more jobs and generate more tax revenue," said Han Xiaoping, chief information officer of China Energy Net Consulting Co Ltd.
"The power plant is also expected to increase energy utilization efficiency and improve local energy structure with more clean energy."
Being more efficient and less expensive in producing power, Chinese enterprises can break Japan's monopoly in coal-rich Indonesia's power generation sector, Han added.
Currently, the province's power mostly comes from high-cost and high-emission diesel generating sets as well as expensive imports from neighboring Malaysia. According to a release by the Indonesian government in December, with the country's power system beyond reach of its remote regions, 2,519 villages are still are living in the dark without power supply.
According to Zhan Ke, president director of PT. GCL Indo Tenaga, a joint venture between GCL and Indonesia Power, the population of Indonesia is three times that of eastern China's Jiangsu province, yet the installed power-generation capacity is only 560,000 megawatts, half of that in Jiangsu province.
The Kalbar-1 power station, which is part of Indonesia's power supply plan to add 35,000 megawatts of power capacity within five years, will be able to supply around 1.4 gigawatt hour of electricity to West Kalimantan power grid every year.
Noting the company's most significant overseas investment along the Belt and Road Initiative, GCL's president Zhu Gongshan said the lack of power supply in the regions has provided Chinese energy companies with an important opportunity to export technology, employment, and better energy mix abroad.