Concept Paper

A RESTORATION ECOSYSTEM OF PT. MOHAIRSON

PAWAN KHATULISTIWA CONCESSION AREA IN
KETAPANG, WEST KALIMANTAN
General information
PT. Mohairson Pawan Khatulistiwa is a logging concession area located in
Ketapang District, West Kalimantan (see Figure 1). The concession was awarded
by the Ministry of Forestry (MoF) as described in the decree No:
SK.216/MENHUT-II/2008 issued on 9 June 2008, but the company has not
operated since then. The area is 48.440 hectares located in the group of Tulak
and Pawan river forests (see Table 1). It was part of logging concessions
managed by PT. Marsela Wana Sekawan, PT. Sumber Baru Jaya Utama and PT.
Pulau Maya.

QuickTime and a
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Figure 1. Location of PT. Mohairson Pawan Khatulistiwa in Ketapang, West

Kalimantan.

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Table 1.Location of PT. Mohairson Pawan Khatulistiwa in Ketapang, West
Kalimantan
No
Area
1.

Group

2.

Geographic location

3.

Government
administration

4.

Forestry
administration

5.
6.
7.

Forest group
Altitude
Watershed area

Descripntin
48,440 Hectares
110o 02 30 - 110 o 1520 E and 1 o
35 30
- 1 o 48 00 S
Sub District of Muara Pawan, District
of Ketapang, West Kalimantan
District Forestry of Ketapang
Provincial Forestry of West
Kalimantan
Tulak and Pawan rivers
1 25 m above see level
Sub DAS Tulak and DAS Pawan

The 48,440 hectares assigned by MoF was merely administrative permission

only. Meanwhile, there is no activity in the area. Although boundary was
defined on maps in the technical document proposed by the company, it has not
been validated in the field. Therefore, the boundary coordination activity needs
to be conducted as mandated by the MoF regulations.
Based on the Landsat-7 ETM+ (Path/Row 121/61 observed on 23 June 2007)
analysis, the area is mainly consisted of secondary swamp forest (about 40.704
ha or 84%), which 32% of them is peat swamp forest (15,501 ha). An initial field
survey conducted by Flora and Fauna Indonesia (FFI) estimated that around 500700 orangutan are living in the area. It found that the area has already been
degraded and not feasible for timber forest production. Hence, this logging
concession area is suitable for a restoration ecosystem due to its characteristic of
degraded forests and rich in biodiversity (orangutan). More importantly, the area
consists of large peat swamp forest with the depth of 3-15 m.

Prospective carbon activity

The area has such quality for restoration ecosystem, which is one of the best peat
carbon offsetting potentials and attractive for investors to start business in
developing carbon markets. Currently, the Mohairson Pawan Khatulistiwa
management is interested in selling the concession and asking for around $3.5
millions without all taxes. However, the price is flexible and open for
negotiation. If a carbon project will be established in this area, additional
funding (around $ 2- 4 millions) is needed to start up the project upfront

Concept Paper
depending on activities (technical and administrative). The followings are
coarse estimated pre-production investment:
Concession takeover
Planning (AMDAL, taxes, IUPHHK, etc.)
Carbon and biodiversity surveys
Roads
Buildings (office, camps, etc.)
Capitals and equipment

: $ 3 4 millions
: $ 1.5 2 millions
: $ 1 - 1.5 millions
: $ 1 1.5 millions
: $ 0.5 1.0 millions
: $ 1 1.5 millions

Total

: $ 8 11.5 millions

If the annual operational cost is around $0.5 1 millions, the project will need
additional $15 30 millions (total around 23- 41.5 millions) for 30 years period.
The concession is potential to carry out several carbon offsetting activities and
generate significant revenues. The following is possible activities and estimated
emissions produced for 30 years operational period:
Improved Forest Management (IFM)
REDD (avoided unplanned deforestation)
Peat rewetting and conservation
Biodiversity (REDD+)

: 0.5 1.5 millions tCO2e

: 2 2.5 millions tCO2e
: 25.5 26 millions tCO2e
: not estimated

Total

: 28 30 millions tCO2e

Assuming the lowest carbon price is $3, total revenues generated from the
project would be around $84 90 millions. Therefore, the project could offer
considerable benefit to investors (at least more than $50 millions for 30 years).
It is also important to note that the current carbon value has been fluctuating
from $5-10 per metric ton in different markets.
However, it is advisable that both investment and revenue estimations are rough
calculations. Initial appraisals, including takeover cost and risk assessments are
needed to have better overviews on how much money are required to start the
project and can be generated during the project period.
Prepared by:
PT. IndoGreenLife (PT. IGL)
Jl. Tumenggung Wiradireja No 216, RT 03/RW 06
Kelurahan Cimahpar, Kecamatan Bogor Utara, Jawa Barat
Tel. 0251 657002, Fax. 0251 657171

Iwan Setiawan

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Email:indogreenlife@gmail.com
Phone: 08129282724