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Softbank pulls out of capital city project
The founder and CEO of Japan-based SoftBank Group has backtracked on a commitment to invest in Indonesia’s new national capital project.
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Building anew: Construction materials lie scattered across a plot of land in the third segment of Indonesia’s expected future capital city in Penajam Paser Utara regency, East Kalimantan, on Feb. 2. (Antara/Bayu Pratama S)
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he founder and CEO of Japan-based SoftBank Group has backtracked on a commitment to invest in Indonesia’s new national capital city to be built from scratch in East Kalimantan.
Citing Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan, Bloomberg reported on Friday that Masayoshi Son would no longer be an investor in the project.
“There’s no more story on Masayoshi. He’s out,” Luhut said in an interview on Wednesday, according to the Friday report. The minister reportedly did not elaborate on why talks with the Korean-Japanese billionaire had ended.
"SoftBank Group is passing on the project but continues to invest in Indonesia through the Vision Fund's portfolio companies," a SoftBank Group spokesperson told The Jakarta Post, referring to the company’s venture capital fund managed by SoftBank Investment Advisers.
The news comes just over two years after Luhut announced in January 2020 that Softbank had offered to invest US$30 billion to $40 billion in the project, following a meeting between Son and President Joko “Jokowi” Widodo a few days earlier.
That same month, the government enlisted Son as a member of the steering committee overseeing the city’s construction, along with Abu Dhabi Crown Prince Mohammed Bin Zayed Al Nahyan and former British prime minister Tony Blair.
The move of the central government capital has been estimated to require Rp 466 trillion (US$32.6 billion). Just under one fifth of that amount, according to government plans, will come from the state budget, leaving the remainder to come from the private sector and foreign investors.
