Indonesia looks for investors to help build new capital

by Hayati Nupus

JAKARTA, April 2 (Xinhua) — The Indonesian government is looking for investors to finance a huge project for its new capital, Nusantara, with an area covering 256,142 hectares of land on the second-largest island of Kalimantan, bordering Brunei and Malaysia.

The first phase of the project development will be carried out until 2024, Coordinating Minister for Maritime and Investment Affairs Luhut Binsar Pandjaitan said, adding that the project is scheduled to be fully completed on the 100th anniversary of the country’s independence in 2045.

Indonesia is exploring a variety of sources of funds to finance the massive project, including using state funds, offering investment to overseas partners, and mobilizing people to crowdfund.

Investors from various countries are offered to build business centers, and government offices would be built using state funds, Pandjaitan said.

According to the National Development Planning Agency, this project requires funds of at least 501.56 trillion rupiahs (about 35 billion U.S. dollars).

“We are open to anyone who wants to come (to invest),” Pandjaitan said on Wednesday.

Investors from the United Arab Emirates are ready to invest their capitals through a sovereign wealth fund, the minister noted.

“Abu Dhabi has confirmed that they will invest 20 billion U.S. dollars,” he said. “We will see how much investment will be.”

Saudi Arabia’s Crown Prince Mohammed bin Salman has expressed his interest in investing in Nusantara when Pandjaitan visited Riyadh in early March, and this Middle Eastern investor is also keen to invest his money in the supply of crude oil, mangroves and coral reefs in Indonesia.

A follow-up meeting is expected to be held in the near future to see potentials and technicalities of each project, Pandjaitan added.

Previously, Softbank had expressed its intention to fund the new capital city project, but the Japanese investor canceled it.

“Softbank has resigned since its shares dropped,” said Pandjaitan.

Another commitment has come from the Asian Development Bank (ADB). The Manila-based institution said in a statement that it would help Indonesia design its new capital city as an inclusive and carbon-neutral city, assess its potential environmental and social impacts, and raise funds from the government and private sources.

The funding opportunity may come from anywhere, including from Indonesians who are enthusiastic about crowdfunding to build public or social facilities, said Chairman of the Nusantara National Capital Authority Bambang Susantono.

Susantono gave an example of how an Indonesian diaspora group proposed the construction of a Diaspora House in the new capital.

“Because the construction of the house will not be financed by the state, they took the initiative to do crowdfunding to build the Diaspora House,” he said.