‘We have decided to go ahead with the project that has absorbed a huge amount of money because the province is facing power shortages due to the rapid growth of factories and new settlement areas in the province,’ the governor said.

The water supply from Lau Renun river to the plant has dropped drastically due to illegal logging in the rain forest in the regency.

The Lau Renun project, which is still in progress, is being built with a US$217.5M soft loan from Japan Bank International Corporation (JBIC). The project started in 1995 and is scheduled for completion in 2004.

Local experts predict that North Sumatra will face a serious power crisis in the next three years if no power plants are built this year.

The existing power plants currently have a capacity to supply 1250MW of electricity but in the next three years the demand for power is forecast to rise by between 10% and 20%.