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Malaysia exports electricity to Indonesia

Malaysian and Indonesian officials at Bengkayang substation in Kalimantan, Indonesia, to celebrate the first cross-border electricity export.

KUALA LUMPUR -- Malaysia said it has successfully transmitted 70 megawatt of power to Kalimantan, Indonesia, in the first cross-border connection, paving the way for more such exports under a regional plan.

The Asian Development Bank-funded project supplies electricity from Mambong, Sarawak, to Bengkayang in western Kalimantan, which is the Indonesian name for Borneo on a 47km double-circuit grid line.

"We, both the Malaysian and Indonesian teams, are proud to be able to execute this long-awaited dream of power trading between neighboring countries," Maximus Ongkili, the Malaysian minister in charge of energy said in a press release on Wednesday.

The project is part of an initiative known as ASEAN Power Grid formulated by the Association of Southeast Asian Nations to beef up electricity infrastructure in the region where economic development is uneven. The bloc is divided into the more advanced countries of Brunei, Indonesia, Malaysia, Philippines, Thailand and Singapore, and the less developed Cambodia, Laos, Myanmar and Vietnam.

ASEAN estimates that only about 66% of the population have direct access to electricity. Under the ASEAN Power Grid program, 15 projects had been identified with an investment of $6 billion.

The Sarawak-West Kalimantan project channels the much-needed power supply to 8,000 households in the Indonesian region from the Mambong substation through a 275 kilovolt interconnection operated by Sarawak Energy, a state energy company.

Both countries did not reveal the value of the power trading but the transmission of hydroelectricity could reduce Indonesia's cost of generation by a third to $0.18 per kilowatt-hour, according to the ADB.

Perusahaan Listrik Negara, Indonesia's state electricity company uses oil for power generation in West Kalimantan. With the renewable supply from Sarawak, Indonesia could save an estimated $100 million annually in fuel costs.

Kalimantan, which is detached from the more vibrant and inhabited Java Island, is less developed. The main economic activities are primarily plantation and timber.

The Indonesian province provides opportunities for Sarawak Energy to sell electricity across the border. The company, which has a power generation capacity of nearly 2,000 MW recently signed a Letter of Intent with North Kalimantan provincial government to explore power generation projects.

The Malaysian government also owns the under-utilized Bakun Dam in Sarawak that is capable of generating 2,400 MW.

Separately, Malaysia is also hoping to sell power to eastern Kalimantan from another state Sabah as well as across the sea to Sumatra from Melaka in Peninsula Malaysia.

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