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Finance Ministry to backstop foreign investment in Nusantara: OIKN
The guarantees, aimed at easing investor concerns over the megaproject’s execution and continuity, will be issued jointly by the Finance Ministry and PT Penjaminan Infrastruktur Indonesia (PT PII), the ministry’s infrastructure guarantee vehicle.
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A worker walks in front of the state palace on Nov. 10, 2024, at the government offices complex in the future capital Nusantara in North Penajam Paser, East Kalimantan. President Prabowo Subianto has said that within the next five years, he will make the new capital city the center of government, where most of his administration’s executive, legislative and judicial activities will take place (Antara Foto/M Risyal Hidayat)
T
he Finance Ministry will provide guarantees to support foreign investment in the country’s future capital city, currently under construction in East Kalimantan, the Nusantara Capital City Authority (OIKN) has said.
The guarantees, aimed at easing investor concerns over the megaproject’s execution and continuity, will be issued jointly by the Finance Ministry and PT Penjaminan Infrastruktur Indonesia (PT PII), the ministry’s infrastructure guarantee vehicle.
“Fellow investors, no need to worry about these projects being terminated halfway. It’s not just us providing the guarantee, this will also be backed by the Finance Ministry,” OIKN head Basuki Hadimuljono said on Wednesday in a statement, as quoted by Kumparan.
Read also: Nusantara’s second construction phase has started, IKN Authority says
The statement followed a meeting between the body and a consortium led by China Harbour Engineering Co. Ltd. (CHEC), where investors sought clarity on the government’s risk-mitigation framework for public-private partnership (PPP) investments.
The consortium, which includes Malaysian construction firm IJM, emphasized the importance of long-term safeguards before moving forward with larger commitments.
The CHEC-IJM consortium is currently involved in two key PPP infrastructure projects in Nusantara: the construction of 20 housing towers for civil servants in the central government area (KIPP), which is estimated to cost Rp 13.4 trillion (US$840 million), as well as a 26.87-kilometer road and multi-utility tunnel in a neighboring zone.
