New Capital: Local investors dominate interest in IKN
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Ibu Kota Nusantara: Investor lokal dominasi minat ke IKN
13 January 2023
By: Afiffah Rahmah Nurdifa and Muhammad Ridwan
Jakarta – Nusantara Management Authority reported that domestic investors are still dominating the intent to invest in Nusantara, East Kalimantan.
Nusantara Management Authority Head Bambang Susantono said that Nusantara Management Authority had received investment letters of intent from 71 investors, which include domestic and foreign investors.
“Investors that are interested surpass 100, but there are 71 domestic and foreign companies who have sent a LOI (letter of intent). Domestic investors are still dominating,” he said in his official statement on Thursday (12/1).
According to him, this shows that the interest of private companies to invest in the new capital is quite significant.
At ‘Early Dissemination for Investment Opportunities in New Capital City (IKN)’, he logged that land demand from potential investors based on LOIs reached 38 ha, which increased by 25 times.
From the market sounding with President Joko Widodo on 18 October 2022 until January 2023, land demand reached 1,793 ha or increased by 44 times.
Bambang said that investors were mostly interested in the infrastructure and utility sectors. Besides the two sectors, investors are also interested in mixed-use and commercial buildings, housing, consulting services, healthcare facilities, private and SOE (state-owned enterprise) offices, government offices, and technologies.
“We believe that infrastructures in IKN that are the focus in 2023 can progress according to plan or even faster,” he said.
Bambang added that the government would work hard to attract investors to IKN according to the government’s commitment to not burden the APBN with IKN construction. He affirmed that the IKN project was crucial for Indonesia’s economic growth and equity.
“Moreover, it is not only Indonesia that will feel the economic impact from IKN, but also Malaysia, according to the Malaysian President,” Bambang said.
Specifically for investments from Malaysia, he logged that there were 11 companies that stated their interest to invest to Nusantara Management Authority. The 11 companies are Tenaga Nasional Berhad, Boustead Properties Berhad, Pharmaniaga Berhad, Berjaya Corporation Berhad, and Carsome.
Then, there are also Protasco Berhad (JCM Engineering), protasco Berhad (i2 Energy), Reneuco Berhad, Olympic Cable Company (OSK Group), Success Electronics and Transformer Manufacturer Sdn. Bhd (SETM), and Alliance MEP (Sarawak) Sdn. Bhd.
According to him, the LOIs are handed over by Minister of Industry and International Trade of Malaysia Tengku Zafrul bin Tengku Abdul Aziz.
Hence, Bambang is immediately demanding the investments from the 11 Malaysian companies that have been received this week.
After receiving the LOIs, Nusantara Management Authority will provide a formal response by attaching several documents, including a non-disclosure agreement (NDA).
“After the NDA is signed, Nusantara Management Authority will provide supporting and technical data to potential investors,” Bambang said.
