The vast archipelago of Indonesia, with 17,500 islands and almost 250 million people, is the fourth most populous country in the world. But while its economy has undergone rapid expansion in recent years, 33 percent of the country’s citizens still have no access to electricity.

Hydropower throughout the country carries tremendous energy potential, and Indonesia has already built several large dams for centralized electricity generation. The cost of linking remote villages to the grid, however, remains prohibitively expensive. The electricity produced by big dams has yet to—and may never—reach the country’s far-flung rural residents.

Many of the villages disconnected from the grid instead burn fossil fuels for local, small-scale power generation. Besides the obvious disadvantage that fossil fuels are nonrenewable and adversely affect human health and climate, rural residents also generally pay higher prices for fuel (and electricity) than urban residents. Because many rural families are poor, this means significantly more money spent on fuel as a proportion of income, which ultimately serves to increase economic inequities along a rural-urban divide.

The Institut Bisnis dan Ekonomi Kerakyatan (IBEKA), or People Centered Business and Economic Institute, answers this challenge by providing microhydro facilities to remote Indonesian villages. IBEKA often provides these facilities for free by borrowing funds from international development agencies and drawing on the local provision of services and materials in the village where the plant is being installed. Since 1992, IBEKA has helped to build 55 microhydro power plants in more than 10 provinces across Indonesia. These currently provide more than 5.3 megawatts of electricity, or enough for more than 20,000 households in 71 different villages across the long spread of Indonesia. IBEKA has also constructed one microhydro plant in the Philippines and one in East Timor, nearby countries that possess similar infrastructural challenges and energy prospects to Indonesia. IBEKA also recently reached out to the Tumba College of Technology in Rwanda.

These small-scale plants typically produce 5-200 kilowatts of electricity each, compared to tens to hundreds of megawatts in large-scale dams; they are an economical and efficient fit for installation in remote villages. Once constructed, the microhydro facility needn’t be connected to a national grid, and it runs freely off the flow of rivers. Importantly, the water is returned unpolluted after withdrawal and can be used for other needs, like irrigation. The plant also covers a very small area of land, about 5-9 square meters, with a single narrow pipeline to carry water from the river and through the turbines.

Finally, and essentially, the components for microhydro plants can be supplied almost entirely through local production, and local technicians can be trained to manage upkeep and maintenance. By providing power, these microhydro plants are also able to provide employment.

In the planning and construction of each microhydro plant, IBEKA recognizes that the sustainability of its rural electrification program hinges on community empowerment; IBEKA therefore serves as a project facilitator in the communities where new plants are sited. Before any projects formally begin, an IBEKA team conducts community social conditioning and project socialization by holding meetings in which members of the village discuss the project potential and learn technical details about facility operations. These early stages lay the foundation for local, communal ownership of the project. After the community understands the potential role of microhydro, and if it agrees to go ahead with the project, then a technical team from Hidropiranti Inti Bhakti Swadaya (PT HIBS), a private Indonesian firm that partners with IBEKA, begins installation of the power plant. Community members are involved in this stage, during which technical instruction on power plant management begins. IBEKA concurrently works to cultivate a sense of belonging and commitment among the wider community, which takes part in decision making from the earliest planning stages through operation. For example, community members must collectively decide on monthly fees for electricity, which houses will receive electricity, and the limits of daily use.


Any Sulistyowati

Small dams collect and divert water to the nearby power plant. Because the quality of reservoir water is important to the function of the system, villagers take care to conserve and monitor local forest resources.

In addition to providing power in locations far removed from central energy distribution, consistent function of these microhydro plants benefits greatly from the conservation of nearby forest resources. Most immediately and visibly, the water intake pipe from the river must have clean water, and a well conserved forest ecosystem filters surface- and groundwater as it flows into rivers. Of course, a fine-meshed grate at the head of the water pipe also helps to perform this service. More importantly, effective forest management assures a steady supply of water, even in the dry season, as the soil more effectively retains moisture. Rivers that run through degraded forests, on the other hand, often slow to a trickle or fully dry up during the summers, leaving even those villages with microhydro plants without electricity. In many villages where IBEKA works, tree planting and land management routines have therefore become an important part of the daily work. In the long run this ensures an environmental buffer for forest villages and creates a long chain of benefits that flows to downstream users like farmers and fishermen, spreading through the region at large.

The Case of Cinta Mekar

The village of Cinta Mekar in West Java is a bright example of a successfully installed microhydro plant. The 120-kilowatt facility—though this number depends on the season and levels of rainfall or drought—was constructed in 2004 through collaboration with PT HIBS and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). The small plant draws water from the Ciasem River and generates electricity for the town’s 646 households. Prior to the project, more than 100 households were entirely without electricity; for many others, service was intermittent. PT HIBS and UNESCAP each invested US$75,000 in the program, and funds were granted to the community through a local cooperative, Mekarsari. Koperasi Mekarsari (Mekarsari Cooperative) was established for the express purpose of managing the plant. The board members of the cooperative, as well as the power plant operators, are all local villagers, and the project has established a training and information center pertaining to plant operations. Mekarsari and PT HIBS now carry equal 50-percent shares of the facility, which has proven a profitable investment for both parties.

Revenue is derived from bill collection and is first spent on basic upkeep costs, including employee salaries. This financial responsibility is divided between PT HIBS and Mekarsari. After covering these relatively fixed costs, the two shareholders are given as profit whatever money remains. This figure generally comes out to about US$650 per party per month. (The average worker salary in this region is $4-8 per day, or $120-240 per month.) The Mekarsari Cooperative reinvests this income in a variety of community projects, from free educational service for poor children to financing for community radio stations in four nearby “subvillages.” Other reinvestments include village infrastructure and a revolving loan fund for community members starting local small businesses. Decisions about how these surplus funds will be used—like the decisions about who receives electricity and how much it will cost—are made as a community. This generally entails a basic visioning process in which villagers work together to determine key steps involved in building a better community.

The success of the program in Cinta Mekar has become a model of IBEKA development, watched and emulated by similar projects across Indonesia. Two of these are detailed below.

Banyubiru, Salatiga

In Salatiga, the local farmers’ union owns a new microhydro facility. Before plant construction, all of the community members already had access to electricity through the national electric company, PLN. However, due to the strong potential of nearby water supplies, the union decided, with a boost of financial assistance, to construct a local hydro plant.


Any Sulistyowati
Microhydro power plants have very small footprints, and the siting and construction process depend heavily on local input and participation. This one in Salatiga has also become a hub of information on renewable energy and sustainable agriculture.

The union now sells the electricity that it generates back to PLN through the grid, a profitable venture that can earn upwards of US$5,500 every month. After deducting operational costs, about 45 percent of the remaining money has been used to replicate microhydro plants elsewhere, 30 percent has been contributed to IBEKA, and the remaining 25 percent is used to finance basic union activities among the farmers.

The microhydro facility has gradually taken on the role of a central meeting place for union members to learn about renewable energy and sustainable agriculture. The local community is working to establish an ecotourism project centered around the microhydro site, as well as a learning center on organic farming, sustainable fish cultivation, and the integration of crop and livestock management; the community also hopes to build a biodigester in order to turn agricultural waste into more energy potential. All of these activities are managed by union members.

Kamanggih Village, Sumba

Sumba is one of the poorest provinces in Indonesia. Residents, scattered across remote patches of land, live largely in a subsistence economy with most hours in the day devoted to corn cultivation, livestock care, and water collection.

Working voluntarily between January and October of 2011, both men and women in the Kamanggih community shared their food, construction materials, and land with IBEKA staff and technicians. After the ten-month collaboration, the Kamanggih Cooperative owned and managed a 37-kilowatt microhydro project.

The plant became fully operational in December of that same year, and since then 100 households have started to enjoy electric services; a payment of about US$2.25 provides light for the night. With this electricity, the local children have been able to do their homework after dark while other members of the household weave baskets of pandan for personal use and sale. The availability of electricity has also contributed to a reduction in kerosene purchases, traditionally used for light sources, which opens up the opportunity to put away new monthly savings.

So far, the town has only had to draw on six of the 37 available kilowatts of power to electrify the households. For the energy potential that remains, the community has devised a number of possible uses, including the following:

  1. Pumping water from nearby sources to houses; or
  2. Automating collective home business activities, such as the post-harvesting process, now done manually.

These two changes alone would significantly reduce the amount of time spent collecting water and processing food. Ideally, these freed hours would be spent instead on other productive or creative pursuits, raising both income and quality of life for the residents of Kamanggih.


Any Sulistyowati
Local jobs are one of the benefits attached to the installation of microhydro plants. A percentage of revenue from the sale of electricity is also reinvested into the community for whatever purposes the community sees fit.

Though the fee that local residents pay for the microhydro services is relatively high compared to income, this is a willing sacrifice made with the understanding that any surplus revenue will be reinvested in the community, and the benefits from these investments spread to all community members.

The Social Importance of Microhydro

Microhydro for IBEKA is not, in the end, simply about providing technical expertise to a small group of employed villagers and the service of electricity to most of the rest. More important, and from a long-term sustainability perspective, IBEKA is developing a method for creating social capital and improving quality of life throughout the small rural communities of Indonesia.

In short, there are several reasons for choosing to build a microhydro power plant:

  1. It uses a renewable resource and can function across much of Indonesia, especially in remote villages that have abundant water resources.
  2. The technology is not particularly complicated, so maintenance can be carried out by local technicians as long as they have proper training.
  3. The basic prerequisite for a microhydro facility is availability of flowing water; but this leads to ancillary benefits, including conservation of forest resources and water quality management in catchment areas.
  4. The technology affords local people full control of their electricity.
  5. Microhydro facilities promise to reduce the electricity-access gap—and therefore the poverty gap—between urban and rural areas.

Fundamentally, this work targets the democratization of access to and control over natural resources. The IBEKA model is growing proof that communities can ably manage their natural resources, and that collective ownership can help assure a fair distribution of benefits, in this case from the electricity and revenue derived from microhydro plants. These experiments are proving especially important at a time when many basic services are undergoing privatization, contributing to the widening gap between rich and poor.


Any Sulistyowati

Catharina Any Sulistyowati has been a LEAD Indonesia Fellow (1998-2000) and Donella Meadows Leadership Fellow (2007-2008). Since 2002, she has worked in KAIL, an NGO focused on increasing awareness of...

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