Five investors ready to conduct groundbreaking for projects in IKN: Phase seven of development
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.
Investor Daily - Lima investor siap groundbreaking proyek di IKN: Pembangunan tahap tujuh
31 July 2024
By Heru Febrianto
Jakarta, ID – Five investors to conduct groundbreaking of projects in multiple sectors at Nusantara Capital City (IKN) next week. These investors are PT Bank Central Asia Tbk (BCA), PT Intiland Development Tbk, PT Inti Cakrawala Citra (Indogrosir), Royal Golden Eagle Group and Swiss-Belhotel International.
This series of groundbreaking will be part of phase seven of the development. To date, 45 investors have completed the groundbreaking process at IKN for phases one through six.
The Acting Head of Nusantara Capital City Authority (OIKN), Basuki Hadimuljono, said that 14 of the 45 investors have entered into a cooperation agreement with OIKN. “Cooperation agreements have been signed on 26 July 2024 between OIKN and 14 investors who have conducted groundbreaking,” said Basuki on Tuesday (30/7/2024).
The signing of the cooperation agreements between OIKN and the investors marks the final commitment before the investment realisation. Therefore, President Joko Widodo (Jokowi) has asked OIKN to finalise the agreements with the 45 investors who have already conducted groundbreaking.
“The President asked us to complete the 45 cooperation agreements soon,” said Basuki who is also the Minister of Public Works and Housing (PUPR), cited from Antara.
According to him, the President expected IKN could serve as a model for swift and efficient governance.
Several incentives have also been prepared to speed up the licensing process at IKN, including Presidential Regulation (Perpres) Number 75 of 2024 concerning the Acceleration of Development of Nusantara Capital City (IKN), which generally regulates the provision of incentives for potential investors who participate in building services and facilities at IKN.
"In relation to investment, the President also said that IKN would be the example of swift and efficient governance. Not only must it be good, but it must also be completed quickly, whatever permits required must be completed faster, so that it can set examples for other urban governance," he explained.
Furthermore, Basuki revealed that several incentives helped attract investors' interest in investing their capital in IKN.
He also stated that a cooperation agreement (PKS) with OIKN must be signed by the five investors who will conduct the groundbreaking the following week. Without PKS, the project cannot start, including the permits.
Attracting investment
Previously, Agung Wicaksono, Deputy for Funding and Investment at OIKN, explained that up until the groundbreaking phase six on 4-5 June 2024, several investors had invested Rp51.35 trillion in IKN infrastructure development. The significant progress in infrastructure development at IKN reflects optimism in meeting the established targets.
"In the groundbreaking phase six, five education and research sector business entities and three support sector business entities participated with a total investment realised reaching Rp1.75 trillion," said Agung recently.
The groundbreaking process for phase one at the end of September 2023 recorded an investment value of Rp22.9 trillion. This was followed by phase two with Rp15.57 trillion, phase three with Rp4.78 trillion, phase four with Rp4.26 trillion, phase five with Rp2.1 trillion, and phase six with Rp1.75 trillion. Consequently, the total investment value in IKN reached Rp51.35 trillion as of June 2024.
According to him, the success of groundbreaking phases one through six was inextricably linked to the contributions of investors who continue to support IKN infrastructure development. The strong interest and seriousness of investors has driven the realisation of significant developments.
"Investment in IKN keeps going in the direction of the established shared vision, with guaranteed accelerated programs for IKN development. The IKN groundbreaking demonstrates the continuity of investment in IKN and the processing of investor interest until it is realised into actual development," said Agung.
In the education and research sectors, groundbreaking has been completed for Bina Bangsa School, an international school and sports center, with an estimated investment of Rp150 billion on a 1.88-hectare area. Additionally, Gunadarma University's International Doctoral Study Program, which will collaborate with several universities from countries such as France, Slovakia, and Sweden, is also undergoing groundbreaking with an estimated investment of Rp75 billion on a 2.45-hectare area.
Furthermore, the estimated Rp150 billion investment will be used to construct the Al-Azhar Summarecon Nusantara Islamic School, which will offer elementary, middle, and high school education. This state-of-the-art, eco-friendly facility will feature laboratories, sports facilities, and a multipurpose building, all situated on 2.9 hectares of land.
In addition, PLN Icon Plus constructed a central telecommunications office on a 1.3-hectare area with an estimated investment of Rp1 trillion. Furthermore, BTN established a banking office and signed a memorandum of understanding for the KPR program, with an estimated investment of Rp86 billion on a 9,000 m² area.
Additionally, Pertamina and the Bakrie Group have collaborated to build the Sustainable Energy Research Center at IKN, known as the "Nusantara Sustainability Hub," on 2.4 hectares of land, with an estimated investment of Rp197.8 billion. In the support sector, groundbreaking has been conducted for the F&B lifestyle arena, with an estimated investment of Rp100 billion over an area of 8,400 m².
Collaborate with local entrepreneurs
Meanwhile, President Jokowi was visited by the management of the East Kalimantan (Kaltim) Chamber of Commerce and Industry (Kadin) and the East Kalimantan Young Entrepreneurs Association (Hipmi) at the Garuda Palace in the IKN area on Tuesday (30/7). The meeting discussed several important issues regarding the involvement of local entrepreneurs in IKN development projects.
President Jokowi supports increasing the participation of local entrepreneurs in IKN development. The President emphasised the importance of Kadin and HIPMI, not only as subcontractors, but also as main players in this project.
"Inshallah (God willing), we will embrace them more widely so that they can become main players rather than only as subcontractors. Hopefully this and later Mr. Basuki and Mr. Pratik will also help to make it easier for us local entrepreneurs to be able to get involved more in developing IKN," said the General Chairperson of the Kaltim Kadin, Donna Faroek, in a statement to the media crew after the meeting.
Hipmi, on the other hand, expressed an interest in actively participating in IKN development projects. They anticipate more opportunities, both in terms of permits and participation in key projects.
