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Jakarta Post

Jakarta mulling to issue bonds to finance mega projects

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, July 3, 2019   /   03:55 pm
Jakarta mulling to issue bonds to finance mega projects Workers stand atop a footbridge connecting the Pemuda Rawamangun Transjakarta bus shelter and the Velodrome LRT Station in East Jakarta, which will integrate the two transportation modes. (The Jakarta Post/P.J Leo)

The Jakarta administration is thinking of issuing regional bonds to raise funds for financing government-approved mega infrastructure projects worth Rp 571 trillion (US$40.35 billion).

Jakarta Governor Anies Baswedan confirmed that his administration was mulling the issuance of regional debt papers, but had not arrived at a final decision.

“The bonds are being studied,” Anies said on Tuesday as quoted by kontan.co.id. He did not offer any additional details, such as the targeted amount of funds.

The decision to develop the Rp 571 trillion infrastructure project was made in March during a limited Cabinet meeting, which Anies also attended. President Joko “Jokowi” Widodo said that the projects, most of which were public transportation projects, were expected to be completed in the next decade.

Anies added that the planned projects also included the long overdue expansion of the water supply network to improve the quality of tap water and to increase coverage across the capital.

On May 31, the Jakarta administration issued Gubernatorial Decree No. 964/2019 on establishing a team to prepare the regional bond issuance. But Jakarta councillor Gembong Warsono, of the Indonesian Democratic Party of Struggle (PDI-P) faction, said that the administration had not discussed the planned bonds with the City Council.  

Reza Fahmi, the head of business development at Henan Putihrai Asset Management, commented that many investors would be interested if the regional bonds were finally issued. (bbn)