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 - Pembangunan infrastruktur: China & AS lirik proyek di IKN Nusantara
13 March 2024
By Alifian Asmaaysi and Jessica G. Soehandoko
The hunt for investors to participate in the development of Nusantara Capital City (IKN) is currently ongoing. Several countries have expressed their interest in participating in the development of the new capital city, which represents the future for Indonesia's central government.
Following expressions of interest from various countries, including Malaysia and Singapore, two major nations, China and the United States of America, have also expressed their interest in participating in the development of IKN.
The commitment of both countries to invest is becoming increasingly serious. Representatives from these nations are actively engaging in meetings with local officials to further solidify their commitment to invest in IKN.
Moreover, US President Joe Biden has sent his envoy to Indonesia to further affirm and develop his support for the sustainable development of IKN.
According to the official statement of the US Embassy in Indonesia on Wednesday (6/3), Enoh T. Ebong, the Director of the United States Trade and Development Agency (USTDA), visited Indonesia from 6 to 8 March 2024 to strengthen USTDA's support.
“The USTDA has a rich partnership history with Indonesia that focuses on advancing priority infrastructure in Indonesia that can be supported by the private sector of the US through state-of-the-art innovations,” Ebong said.
During his visit, Ebong explored several potential locations in IKN, announced a new commitment, and participated in programmes funded by the USTDA.
Later, Ebong will host the USTDA Nusantara Business Forum that focuses on smart city solutions, commercial opportunities, and workshops for 60 Indonesian officials from 12 government institutions. The aim is to optimise infrastructure procurement in IKN.
Additionally, he also announced USTDA’s support for the reverse trade mission, aimed to introduce Indonesian officials to the solutions implemented in US cities to assist the preparation of new projects. USTDA will also provide funds to support the electricity transmission interconnection project between Indonesia and Malaysia.
Ebong stated that local infrastructure projects would also be prioritised through meetings with recipients of USTDA’s grants, officials from the Indonesian government, and representatives from the private sectors of both the United States of America and Indonesia.
He mentioned that his agency would support Indonesia's efforts to build a world-class capital city, which is considered challenging but fosters numerous collaborations.
“Among our projects in the country, USTDA is actively supporting Indonesia's endeavour to develop a world-class capital city. This challenging initiative also presents numerous opportunities for cooperation,” he stated.
Investment package
Previously, IKN Authority Funding and Investment Deputy Agung Wicaksono hosted a market briefing for potential investors from diverse countries, including representatives from the US and China.
The market briefing was held to announce the first smart city investment package to potential investors.
Agung emphasised that smart city investments encompassed not only technology, but also the overall quality of life of the public, including environmental sustainability.
Through this activity, potential investors are expected to see the potential of the four investment packages that will be offered. The four investment packages are the Integrated Command Control Centre, Data Centres, Electric Vehicle Charging Stations, and Smart Poles.
On the other hand, at several bilateral meetings with Indonesian President Joko Widodo (Jokowi), Chinese President Xi Jinping have stated his commitment to invest in IKN development.
Regarding the cooperation on IKN, Indonesia and China have signed a memorandum of understanding on collaborative planning to share knowledge and experiences related to the relocation of Indonesia’s new capital.
For IKN development, Jokowi hopes China can continue to be a strategic partner. “Hopefully, the cooperation of IKN Authority with Shenzhen Local Government can contribute to the planning and development of IKN,” Jokowi said as quoted from his official statement on the official website of the Cabinet Secretariat on Friday (28/7/2023).
IKN development adopts the forest smart city concept, integrating cutting-edge technologies into city governance.
China, as a country that has the most smart cities in the world, stated that it was ready to cooperate with Indonesia to build a smart city in IKN.
Meanwhile, IKN Authority reported that China, as a potential investor, has the potential to realise investments in Nusantara this year.
Agung Wicaksono said that foreign investors from China and Malaysia would invest in IKN.
He mentioned that investors from both countries were interested in investing in the property sector. They are planning to construct vertical housing or apartments in IKN.
He mentioned that the overall investment value from both countries in Nusantara would reach around Rp40 trillion.
“The property construction projects by foreign investors from both countries are still undergoing feasibility studies, with tendering expected around April 2024,” Agung said.
With investors from China and Malaysia entering IKN, they will be the first foreign investments to be realised in IKN. Besides the property sector, China is also targeting projects in the transportation sector in IKN.
This was revealed at the meeting between Transportation Minister Budi Karya Sumadi and Transportation Minister Li Xiaopeng in January 2024.
During the meeting, they discussed a cooperation to follow up the construction of the railway mass transportation in IKN.
In addition to meeting the Chinese Transportation Minister, Budi also engaged with several leaders from the China Railway Rolling Stock Corporation (CRRC) to discuss the ongoing cooperation regarding the construction of the autonomous rail transit (ART) in IKN.
