Indonesia and Japan have agreed through the signing of the Letter of Intent (LOI) in Implementing the Kayan Hydropower Project on Feb. 28, 2025, to encourage sustainability in the development of the Kayan Hydropower Plant in Peso District, North Kalimantan Province in support of Indonesia's clean energy transition.

The signing of the LOI was carried out by the Coordinating Ministry for Economic Affairs Economic Cooperation and Investment Deputy II Edi Prio Pambudi and the Japanese Ministry of Economy, Trade, and Industry (METI) Deputy Commissioner for International Affairs Masanori Tsuruda.

Edi said that the Kayan HPP project is one of several initiatives which are being or will be implemented by Indonesia to support the achievement of its net zero emission (NZE) commitment by 2060.

"For Indonesia, the Kayan HPP is not just an infrastructure project within the AZEC (Asia Zero Emission Community) framework. This project is [also] a strategic investment for Indonesia's energy security and decarbonization efforts," he said through a written statement on Mar. 4, 2025.

Edi also emphasized the importance of Japan's role as a strategic partner in implementing energy transition policies and projects in Indonesia. The Indonesian government encourages Japan to strengthen cooperation in implementing practical, scalable, and inclusive energy transition projects.

Meanwhile, Masanori said that the milestone that is the signing of the Kayan HPP LOI needs to be followed-up by Indonesia and Japan to realize the HPP's construction.

"The challenges to build the Kayan HPP are not easy [to overcome], but we are confident that the good bilateral relationship between Japan and Indonesia is a strong foundation for the Kayan hydropower project," he elaborated.

The Kayan HPP project is one of several projects in the AZEC framework, a platform for cooperation towards carbon neutrality or NZE in the Asian region.

At the 2024 Expert Group Meeting, the Kayan HPP was designated as a category II project, or a potential project that is ready to be commercialized but is still in the feasibility study stage, along with the peatland management project and the Java-Sumatra transmission network.