- The three foreign investment projects in Nusantara were worth about $63 million
- Indonesian government planned 80 percent of the $32-billion project to be funded by private sector
JAKARTA: Indonesia’s outgoing President Joko Widodo broke ground on Wednesday for Australian, Russian and Chinese projects in the country’s future capital Nusantara, marking the first foreign investment in his administration’s flagship $32-billion initiative.
Southeast Asia’s largest economy is relocating its capital to East Kalimantan on Borneo island to replace the overcrowded and sinking Jakarta on Java island, with the megaproject scheduled for completion in 2045.
“This morning, we broke ground for education investment from Australia. Then we also broke ground for property development by Russian investors. And … we are about to do another groundbreaking (project) for a mixed-use property development from Delonix Nusantara, from Chinese investors,” Widodo said during a livestreamed ceremony in Nusantara.
“The foreign investments that are coming in are giving us the belief and confidence that Nusantara is an extremely attractive location for investments.”
Chinese property firm Delonix Group is investing $33 million in the complex of hotels, office and community retail spaces in Nusantara.
The Australian Independent School and Russia’s property developer Magnum Estate are two other investors working with local partners and investing around $9.9 million and $19.8 million in Nusantara, respectively.
Since Widodo unveiled his plan in 2019, the new capital project has faced construction delays and struggled to attract the hoped-for foreign assignment. The mammoth undertaking is expected to mostly rely on private investors, with government funding planned to cover 20 percent of the total expenditure.
The government has so far signed many letters of intent, Widodo said, but officials are carefully choosing projects to “adjust them to the needs of Nusantara.”
The new capital that has been widely seen as the president’s attempt to seal his legacy previously received a $1.3 billion investment from a consortium of Indonesian companies.
Widodo has said he is planning to spend the last weeks of his second and final term in office there. His successor, President-Elect Prabowo Subianto, will take office on Oct. 20.
