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Govt to realize Nusantara FDI after election dispute ruling
Following lackluster investment realization as businesses took a "wait and see" approach in the lead-up to the 2024 election, the government is planning to push foreign investors to make good on their IKN commitments once the election dispute is settled.
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Cranes, scaffolding and heavy equipment are spotted on Dec. 7, 2023 at the project site of the Central Government District (KIPP) in Nusantara, Indonesia’s new capital city under development in North Penajam Paser regency, East Kalimantan. (Antara/M Risyal Hidayat)
T
he government plans to accelerate realization of foreign direct investment (FDI) commitments for the Nusantara Capital City (IKN) development project after the Constitutional Court issues its verdict in the electoral dispute later this month, according to Investment Minister Bahlil Lahadalia.
"We have received a lot of commitments [from foreign investors], but they did not materialize during the period of the general election. We can only count investments after they start building, not when they express an interest," Bahlil said on Monday after a meeting with President Joko "Jokowi" Widodo, as quoted by Kompas.com.
At an offline event with investors and bankers in early February, President Joko “Jokowi” Widodo acknowledged that businesses had adopted a "wait and see" approach prior to election day on Feb. 14.
Last November, he said that no foreign investments had been realized, but the government made assurances that the IKN project had generated many expressions of interest.
In March, the IKN Authority announced a plan to start working on 70 residential towers in the future capital this year through blended financing involving the state budget and investors in a public-private partnership.
The authority also said seven developers had received letters to proceed with their projects, including Perintis Triniti Properti (Triniti Land), Nindya Karya, Intiland and Ciputra Group, as well as the members of Nusantara Consortium that includes Indonesian conglomerates such as Salim Group, Sinarmas, Mulia Group and Astra Group as of this January.
Among the foreign developers are China’s state-owned CITIC Construction and Malaysia’s IJM Corporation and Maxim Global.
