Japanese company lead the development of hydro power projects from a majority ownership position

Tongar Hydro Power Project was initially developed solely by an Indonesian company since 2013, including securing various rights and signing a power purchase agreement with PLN. The project had stalled owing to technical and financial issues. However, these issues were resolved through technological optimization and financial support provided by NiX Group's Indonesian subsidiary NIC and NiX Japan. This represents a particularly rare case where a Japanese company, as the majority shareholder, successfully developed and operated its own hydro power plant.

Our local subsidiary, NIC, acted as the owner's engineering and conducted repeated optimization studies to enhance feasibility and profitability, thereby reducing project costs and mitigating risks. During the construction phase, several employees were stationed onsite as the owner's representatives to manage construction work, ensure quality assurance, and manage the construction timeline. By providing technical and managerial support, they played a crucial role in ensuring the successful completion of the project.
Furthermore, by having JV partner PT. Nusa Konstruksi Enjiniring, whose main business is civil engineering, carry out the civil engineering work as the owner's construction, we have created a scheme that can control delays in construction time, cost management, and deterioration in quality.

Also, many local residents are employed in the operation and maintenance of the power plant, and we will continue to foster economic growth in the local community by providing new employment opportunities.

Utilization of BIM/CIM

We are actively incorporating the Construction Digital Transformation (DX) in engineering, and is utilizing BIM/CIM technology for the 3D and 4D models created by NIC for design and construction management. By creating and visualizing a 3D model prior to construction, we were able to share our vision with the construction company, which facilitated interference checks within the structure, allowing us to identify areas with potential construction challenges. And by utilizing BIM360's automatic quantity calculation feature, considerable reductions in errors and rework were achieved along with a decreased workload for routine tasks. In addition, a 4D model was created by integrating project management data—such as time, equipment, and manpower—into the 3D model. This enabled the simulation of construction procedures in alignment with the schedule and facilitated the identification of difference related to structural interferences, delays, and allocated resources.

By clearly visualizing the feasibility and safety of the construction process and sharing unified information from design through construction management with the construction company, we have enhanced the efficiency of project management and improved construction quality.

In addition to daily progress reports, the overall schedule was monitored in real time by reviewing weekly drone shooting of the construction progress. By utilizing BIM360, construction management can now be conducted from remote locations, this enables management across four key locations: the construction site, the Jakarta office, remote work from home, and the Japan headquarters. This approach facilitates a flexible working style, free from the constraints of time and location.

*Check 4D model
Tongar Hydro Power Plant 4D model August 2022

Received the Minister of Land, Infrastructure, Transport, and Tourism Award in the Small and Medium-Sized Enterprise Category at the JAPAN Construction International Awards

We received the Minister of Land, Infrastructure, Transport and Tourism (MLIT) Award in the Small and Medium-Sized Enterprise Category of the 7th JAPAN Construction International Awards for our efforts in the Tongar Hydro Power Project.
This award is intended to further promote the spread of "high-quality infrastructure in Japan" by the MLIT, to raise the international profile and to support the further overseas expansion of Japanese companies. Also, it is expected to increase the interest of the younger generation in the future of the construction industry by informing Japanese people about construction projects that are highly acclaimed overseas and Japanese companies that are active in overseas markets in an easy-to-understand manner.

【Evaluation Points of the Project】
The MLIT has provided an evaluation on the following aspects.

1. By utilizing a project finance agreement with the Indonesia state-owned development bank and securing funding with the support of a Japanese government financial institution, the company established a Singapore-based holding company to serve as the central hub for its overseas operations, also considering business expansion into Southeast Asia, where Feed-in Tariff (FIT) systems are in place to promote the adoption of renewable energy.

2. In accordance with the development of hydro power project, the community road has been paved and is used jointly by the local residents.

3. When roads and public facilities were damaged by the earthquake, the company used its construction equipment and personnel resources to repair public roads free of charge, giving top priority to disaster recovery.

The Tongar Hydro Power Project was Featured in MOU in Preparation for the Asia Zero Emission Community (AZEC) Summit Meeting

The Asia Zero Emission Community (AZEC) Summit Meeting was held on December 18, 2023, seizing the opportunity of the Special Summit Meeting for the 50th Anniversary of ASEAN-Japan Friendship and Cooperation. Prime Minister Kishida (at the time), Minister of Economy, Trade and Industry Saito (at the time), and other Japanese officials attended the meeting, joined by leaders from AZEC partner countries. Discussions focused on the framework and initiatives of AZEC.

Our project was highlighted as one of the case on efforts toward decarbonization in Asia. While most projects are still in the preliminary stages, such as creating letters of intent (LOI) or entering Memorandums of Understanding (MOU), cooperation agreements, or basic agreements primarily involving major entities such as trading houses, power and gas companies, and financial institutions, this project was evaluated as a project that has already progressed to the commercialization stage.

Selected as a 2024 Outstanding Project by PT. Sarana Multi Infrastruktur Persero, Indonesia's state-owned development bank

OTE, the special purpose company that is the main body of the Tonga Hydro Power Project, was selected as one of eight excellent projects from among approximately 140 projects by SMI, for implementing excellent projects.

SMI is a state-owned development bank, that is a wholly owned by the Ministry of Finance of Indonesia, and plays a key role in promoting infrastructure development projects within the country. SMI and OTE entered into a project finance agreement for the Tongar Hydro Power Project, securing financial support to advance the project.

SMI prioritizes the principles of Environmental and Social Safeguards (ESS) in all of the loans that it provides, overseeing the Environmental and Social Due Diligence (ESDD) assessments and the implementation of Corrective Action Plans (CAPs) for environmental and social management, and evaluates borrowers' compliance and performance levels.

During the evaluation period from July 2023 to July 2024, OTE was evaluated for its proper and complete implementation of the CAP in the Tongar Hydro Power Project and was selected as a project with good environmental protection, social safeguards, and repayment performance.

Tongar Hydro Power Plant completion ceremony

The completion ceremony was held on December 18, 2023 at the Tongar Hydro Power Plant.

The completion ceremony was attended by nearly 100 participants, including representatives from government agencies and financial institutions from Japan, while also conducting an on-site inspection. As well as local government officials and others who assisted in the completion of the hydro power plant. In the congratulatory speeches, we received greetings from the Embassy of Japan in Indonesia, the Governor of West Pasaman Province, the Ministry of Energy and Mineral Resources, and PT PLN, Indonesia's state-owned electricity company.

The completion ceremony was a vibrant event that incorporated elements from both cultures, including a local dance performance and eye-painting of a darma doll brought from Japan.