Indonesian government plans to land foreign investment in the new capital this year

The IKN Authority of the New National Capital (IKN) is targeting to land foreign investments in East Kalimantan (Kaltim) New Capital (IKN) this year, with the authority claiming that the interest of foreign investors in the area is quite high.OIKN's Deputy Officer for Financing and Investments said that the investment plan for IKN that is being considered by many foreign investors is the government's partnership with a business entity (KPBU). Foreign investors are interested in such PPPs, so the government is aiming that this huge interest from foreign investors will start to take hold by 2024. This year, the government's investment target in Xindu reaches Rp 100 trillion, a figure that comes from both the public and private sectors, with a realization of Rp 47.5 trillion by the end of 2023. Rp 35.9 trillion for the private sector and Rp 11.6 trillion for the public sector.

The time required for an investor to obtain a license also depends, in practice, on the sector and investment mechanism chosen, with the PPP being the most time-consuming option. The time required to join a PPP is 12 months, during which time all requirements must be completed. The reason for this length of time is because certain aspects of the feasibility study have to be evaluated along with the Ministry of Finance and auctions, for example. This is a lengthy process because the Government has a risk-sharing role, so investment partners must be carefully selected and identified, but investors from private sector direct investment will progress more quickly.