KONTAN.CO.ID - JAKARTA. Indonesia's President Joko Widodo on Wednesday launched the construction of a $2.6 billion hydropower plant that would be linked to a planned industrial park in North Kalimantan.

The power plant, called Mentarang Induk, is being developed by PT Kayan Hydropower Nusantara, a joint venture between Indonesian companies PT Adaro Energy Indonesia and PT Kayan Patria Pratama Group, and Malaysia's Sarawak Energy Bhd.

The 1.375 gigawatt plant will be linked to an industrial area the president said will house electric vehicle and battery plants as well as aluminium and petrochemical facilities.

He said the hydropower project is expected to finish construction in seven years to power the planned park.

"Our hope is that Indonesia's economic transformation would really take place toward a green economy," Jokowi, as the president is known, said in a ground-breaking ceremony that was streamed online.

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Indonesia is a major thermal coal producer and relies on it as its main source of power but has pledged to move away from the dirty fuel and reach net-zero emissions before 2060.

The country, which is one of the world's biggest emitters of greenhouse gases, aims to increase the proportion of renewables in its energy mix to 23% by 2025, up from around 12% currently.

While less emissions-intensive than coal, environmentalists agree that dams can also cause issues like disruption of water flow, sediment flow and ecosystems.

Editor: Yudho Winarto