The 2400MW Bakun dam project, currently being reviewed for economic viability, will now proceed but is first to be restructured, said deputy prime minister Najib Razak in Kuala Lumpur.

The announcement marks a major step forward for the scheme, which has been criticised not only for its potential to flood large areas of the Borneo rainforest, but also for the uncertainty over whether it can find a large enough market for its power.

Doubts about the feasibility of the scheme were raised in the local media earlier this year when it was claimed that an aluminium plant in Sarawak state would be the only buyer of Bakun’s electricity.

Under the new plans, the Malaysian government is reportedly planning to take complete control of the power plant, which will now supply electricity to both Sabah and Sarawak states, while discussions with the owner of the aluminium plant continue.

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