At least five foreign investors have expressed their interest in developing Indonesia’s new capital city in East Kalimantan, a minister has said, as the government seeks greater private sector involvement in financing the relocation plan.

National Development Planning Minister Soeharso Monoarfa said that the prospective investors were from the United Arab Emirates (UAE), the United States (US), the United Kingdom (UK), Japan and Germany. 

“Each [investor] has offered their respective capacities and technologies. [Japanese conglomerate] SoftBank, for example, wants to provide autonomous vehicles,” Soeharso said at the Presidential Office on Wednesday, but stopped short of mentioning any details about the German investor.

During a recent visit to the UAE, President Joko “Jokowi” Widodo invited Crown Prince Sheikh Mohammad bin Zayed Al Nahyan to join the relocation project’s  board of advisors.

Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan, who accompanied Jokowi on the visit, said on Jan. 14 that former UK prime minister Tony Blair and SoftBank Group CEO Masayoshi Son were also expected to join the advisory board, as quoted by kompas.com.

The presence of internationally renowned figures on the steering committee was expected to attract more foreign investment to developing the new capital, said Soeharso. 

Jokowi’s UAE visit had also brought Indonesia closer to establishing its own sovereign wealth fund (SWF), a plan for which the UAE, SoftBank and the US International Development Finance Corporation (IDFC) had expressed support.

Soeharso added that the SWF could provide financial capital for the relocation project as well as other infrastructure projects. 

The government announced in August 2019 that the Indonesian capital would be moved to a 256,000-hectare area straddling the regencies of North Penajam Paser and Kutai Kartanegara in East Kalimantan, citing a need to ease the burden off Jakarta and to spread development more equitably across the country.

The Public Works and Housing Ministry is to provide basic infrastructure in the new capital, particularly the new presidential palace and other government buildings in the 5,600 ha downtown area.

The government would invite the private sector to help develop non-public infrastructure through a public-private partnership (PPP) or direct investment, Jokowi said in a Cabinet meeting on Wednesday. The President expected this would reduce the costs of moving the capital, which he estimated would be around Rp 100 trillion (US$7.29 billion).

Jokowi’s estimate is considerably lower than the initial figure of Rp 466 trillion.

[Source: “Tony Blair joins SoftBank, UAE crown prince as advisors for Indonesia’s new capital” published by TheJakartaPost]
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