New capital city: Reaping heavy investment flow 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 baru: Menangkap arus deras investasi IKN
16 June 2023
By: Afiffah R. Nurdifa
Nusantara Capital City Authority is continuously busy with the heavy flow of investments from various private companies all over the world. Until now, there are at least 223 letters of intent to invest in the new capital city.
The various amenity packages in Nusantara Capital City (IKN) are proven to be effective in attracting investors to at least see the opportunities available in the area. Moreover, the government is also continuously marketing IKN as one of the mainstay investment destinations in Indonesia.
Agung Wicaksono, Funding and Investment Deputy of IKN Authority, revealed that Japan was one of the countries most interested in IKN as an investment destination. There are at least 26 Japanese companies that stated they wanted to invest in IKN.
Then, there are 22 companies from Singapore, 16 companies from Malaysia, and 15 companies from China. Besides that, there are also companies from Europe that have stated their interest to invest in IKN, such as the four companies from France.
“I received letters of intent from energy companies. So, out of the 20 companies [from France], we have received four letters of intent. In the future, we hope that other countries in Europe will also be interested,” he said as quoted on Thursday (15/6).
Agung said that land availability in IKN was the main attraction for investors to enter the new capital city. Moreover, the government is also offering several investment packages that have various incentives and amenities.
“They [French companies] are asking for the documents so that they can prepare a proposal. After that, they will calculate the numbers, [prepare] a business plan, and [conduct] a feasibility study. Then, it will be easy to negotiate and make an investment,” he explained.
IKN Authority Head Bambang Susantono has invited French Ambassador to Indonesia Fabien Penone and several delegates from various companies in the country to visit IKN at the start of this week.
The visit will be the first time that potential investors from Europe are visiting IKN. The visit will follow up the investment commitments in IKN.
“I think they are going all in, not just as investors, but also as business players,” he stated.
On the other hand, Masdar, a clean energy company from United Arab Emirates, is also exploring the possibility to invest in IKN after their visit to the area.
IKN Authority Funding Director Insyafiah said that Masdar has submitted a letter of intent to invest in clean energy development in IKN.
“Alhamdulillah (Praise be to God), we received a LoI (letter of intent) from Masdar, a company that engages in renewable energy,” he said.
Several companies from United Arab Emirates visited IKN on 14 June 2023. The visit was accompanied by IKN Authority, Foreign Affairs Ministry, and Investment Ministry/Investment Coordinating Board.
Dony Suryaman, Masdar Clean Energy Indonesia Business Development Director, said that his company was impressed with the development progress of IKN. He ensured that Masdar would continue the LoI to the next step.
“As a form of Masdar’s commitment to developing clean energy in Indonesia, Masdar is interested in contributing to the development of clean energy in IKN with a mutually beneficial business scheme for both parties,” Dony stated.
He explained that Masdar has a big ambition to develop new renewable energy (NRE). Masdar is targeting a portfolio of 100 gigawatts (GW) of NRE in Indonesia in 2030.
Masdar is known as a capable company in NRE development.
Several projects that are being developed by the company are solar, wind, and water energy technologies to produce clean and sustainable energy.
PPP scheme
Previously, the government also explored a cooperation opportunity with Germany in the infrastructure sector through the public-private partnership (PPP) scheme in IKN.
Public Works and Housing (PUPR) Minister Basuki Hadimuljono said that the Indonesian government was open to exploring cooperation in IKN through the PPP scheme, which includes the cooperation potential with Germany.
The cooperation that is being explored by Indonesia and Germany is the utilisation of technology innovations that prioritise sustainability to support IKN development.
“President Joko Widodo has offered IKN projects that are full of potential for investments using the PPP scheme to construct buildings, housing, hospitals, commercial centres, and other [projects],” he said.
Basuki explained that basic infrastructure construction in IKN has been carried out since early September 2022.
Several infrastructures that have been constructed include toll roads, national roads, raw water provision facilities, flood control infrastructure, housing for IKN construction workers, and official housing for ministers.
