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Indonesia’s New Capital Authority to Follow Up on Malaysian Firms Investment Plans

January 13, 2023, 04.33 PM

JAKARTA, – Authority of Indonesia’s planned new capital Nusantara (IKN) will follow up on Letters of Intent (LOI) received from 11 Malaysian enterprises on investing in the country’s future capital.

Head of the IKN Authority Bambang Susantono said that after receiving the LOI, his party will provide a formal answer by attaching several documents, including non-disclosure agreements (NDA).

"After the NDA is signed, the IKN Authority will send the supporting and technical data to potential investors," he said in a statement on Wednesday, Jan. 13.

To date, a total of 71 investors, including 11 Malaysian companies, have submitted LOIs on IKN development. Three of them have obtained project initiative permits (SIPP) from the Indonesian government.

Also readIndonesia Discusses Investment in New Capital City Nusantara at G20 Foreign Ministers Meeting

"There are more than 100 foreign and national investors who are interested [in the project], but [only] 71 companies have sent their LOIs,” Susantono said.

More national investors have sent LOIs compared to foreign ones, he added.

The 11 Malaysian investors are interested in investing in waste management, telecommunications infrastructure, property, roads, health and pharmaceutical services, renewable energy, as well as e-commerce platforms, among other things.

According to data from the IKN Authority, the land demand from potential investors who have sent their LOIs has reached 965 hectares, which is 25 times higher than the 38 hectare-land offered initially during the implementation of the pre-market sounding of investment opportunities at IKN.

Meanwhile, after the implementation of the market sounding with President Joko “Jokowi” Widodo from Oct. 18, 2022, till January 2023, the demand surged to 44 times higher than the initial land allocated by the government or 1,793 hectares.

Investors have evinced interest in the infrastructure and utility sector the most, followed by mixed-use and commercial development, housing, consulting services, health, private and state-owned office construction, government offices construction, and technology, Susantono said.

Also readJokowi Chooses Nusantara as Indonesia’s New Capital Name, Says Minister

"We are sure that the [development of] infrastructure at IKN, which is the focus [of our work] in 2023, will run according to the plan or even faster," he said.

Furthermore, the government will continue to strive to involve investors in building Indonesia’s future capital, following the government's commitment to not burden the state budget (APBN) in developing the city, he added.

"IKN is very important for Indonesia's economic growth and equity. Indonesia will not be the only country which gets the economic impact of [the establishment of] the IKN, but also Malaysia, as stated [earlier] by the Prime Minister of Malaysia [Anwar Ibrahim]," he said.

On the last day of Anwar’s two-day state visit to Indonesia, he met Jokowi at the Bogor Palace, near Jakarta. The two leaders then discussed issues including trade, border disputes, and the situation in coup-hit Myanmar. It is customary that the first foreign visit of a new Malaysian prime minister takes place in neighboring Indonesia

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