The Mini Hydro Power project, the 600 hectares Dewata estate which produces 1 200 tons of made tea per year, relied exclusively on diesel generators to supply power for running the factory and supplying estates workers’ houses with lighting. The project idea started to take shape toward the end of the 90’s when diesel fuel was still highly subsidized. Therefore, the trigger to build the MHP was a combination of the desire to help preserve the forest and an awareness that sooner or later fuel prices would have to increase with the removal of subsidies. Through the implementation of this project, PT. Chakra sees a window of opportunity to encourage other estates follow their example for both economical and environmental reasons. By owning and operating an MHP project, it becomes imperative for the owner to conduct catchment area preservation activities to ensure a sustainable continuous flow of water.
Dewata’s dependence on diesel fuel for energy generation is representative of the estate sector in Indonesia. The Dewata example is fully financially viable and could therefore be replicated in many tea estates in Indonesia. It is hoped that through the exposure of the Dewata example, policy makers, financing institutions and potential project stakeholders will be encouraged to pursue similar initiatives in the future contributing to the mitigation of global warming providing positive impact on the environment.
The total investment cost of the scheme including the local engineering costs was approximately US$ 350 000. This translates into a cost per kilowatt installed capacity of approximately US$1 400. From this total 50% represented a loan component and 50% equity from PT.Chakra. A portion of the engineering costs was provided as a contribution from the MHPP project and consisted primarily of the technical assistance provided in the local design and manufacture of the electro-mechanical equipment and the preparation of the feasibility study and detailed design.