Indonesia’s Nusantara New Capital Projects Are Investment Hotspots

The Government of Indonesia is pushing ahead with developing Ibu Kota Nusantara (IKN), the country’s future capital on Kalimantan Island. The plan is making positive strides.

According to the progress report on the construction of IKN Nusantara published by the IKN Infrastructure Development Task Force of the Ministry of Public Works and Housing reports, as of mid-August 2023, the initial phase of IKN construction has reached a 41.03 percent completion rate.

After March 2023, the first batch comprises 39 work packages categorized into three groups, i.e. physically constructed (fisik), contracts made (terkontrak), and under tender/preparation (sedang persiapan/proses lelang).

The report further notes that the State Palace and Ceremony Field construction is currently 22.135 percent complete. Additionally, the progress for the Office of the President and the Office of the Presidential Secretariat stands at 27.525 and 22.72 percent, respectively.

Other projects include the construction of offices for the Coordinating Ministry I (12.78 percent), the Coordinating Ministry III (10.429 percent), and the Coordinating Ministry IV (15.135 percent).  Similarly, the construction progress for the Office of the Ministry of the State Secretariat is at 16.165 percent.

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The official ministerial residences, known as Rumah Tapak Jabatan Menteri (RTJM), are currently 22.681 percent complete,with the expectation of being ready for occupancy by 2024.

Investors Are Flocking to IKN Projects

Not only is IKN buzzing with government building projects, but it also attracts a growing number of investments for supporting infrastructure construction.

Agung Wicaksono, the Deputy for Financing and Investment of the IKN Authority, recently reported that the new capital projects have been gaining traction with investors.

He said that by the end of September, the authority received 270 letters of intent (LOI) for investments in IKN, spanning both domestic and international investors.“The majority come from Indonesian companies, comprising over half of the total, with additional interest from Southeast Asia countries like Singapore and Malaysia, and nations like Japan and Korea,” explained Agung.

Agung had previously shared that a Saudi Arabian investor showed interest in renewable energy projects in the new capital. Currently, both parties have reportedly entered into a non-disclosure agreement.

Through this collaboration, the government will boost the utilization of new and renewable energy sources, including solar, water, and wind.

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Regarding the economic potential, opportunities for a wide range of industries in the region are enormous. There are huge possibilities for courier services, household goods, food businesses, accommodations, and light and heavy industries.

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