Indonesia's Ministry of Investment (BKPM) and the Nusantara Capital City Authority (Otorita Ibu Kota Nusantara, OIKN) announced that cumulative non-state private and international investment realized across eight groundbreaking phases in the new capital city of Nusantara has reached 58.41 trillion rupiah ($3.85 billion). The capital commitments span 55 distinct infrastructure and commercial projects currently under development in East Kalimantan.
Designed as a sustainable, forest-integrated smart metropolis to replace sinking and congested Jakarta as Indonesia's administrative seat, Nusantara relies on public-private partnerships and direct private investment to fund roughly 80 percent of its long-term development budget, with the state budget (APBN) covering core government buildings and arterial roads.
Direct Foreign Capital Joins Domestic Conglomerates in Phase Eight
The latest eighth groundbreaking phase represented a pivotal milestone by welcoming the first wave of direct foreign-owned projects alongside Indonesian corporate leaders. New developments include a mixed-use commercial complex by Beijing-based Delonix Group totaling 500 billion rupiah, an international campus by Australian Independent School (AIS), and a resort and residential hub developed by Magnum Estate International.
Previous groundbreaking waves have already seen major domestic institutions—including Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Central Asia (BCA), Hermina Hospitals, Mayapada Hospital, Pakuwon Group, and Astra International—commence construction within the Central Government Core Area (KIPP), supported by a 50-megawatt solar power plant operated by PLN Nusantara Power and Sembcorp.
“Exceeding 58 trillion rupiah in private and foreign investment across eight groundbreaking phases demonstrates enduring global investor confidence in Nusantara's future.”
Fiscal Incentives and Green Smart-City Infrastructure Drive Momentum
To accelerate private capital deployment, the Indonesian government enacted sweeping fiscal incentives under Government Regulation No. 12/2023, offering corporate income tax holidays of up to 30 years for strategic infrastructure investors, import duty exemptions on capital goods, and extendable land-cultivation and building rights (HGB) lasting up to 95 years.
With the newly inaugurated Nusantara Airport and toll road corridors cutting travel time from Balikpapan to under 40 minutes, OIKN officials reported that over 500 letters of intent (LoIs) from domestic and international investors are currently advancing through feasibility and land-allocation reviews.
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