The UAE on March 24 reaffirmed that it would invest in Indonesia’s new capital city project through an existing $10 billion funding commitment to the Indonesia Investment Authority (INA).
UAE ambassador to Indonesia Abdulla Salem Obaid al-Dhaheri said that a portion of the funds would be directed toward the new capital project, while the remainder would go to other projects in strategic sectors such as infrastructure, food security, logistics, E-learning, digital infrastructure and vaccines.
“The UAE is committed to investing in developing a new capital city in Kalimantan, also encouraging other parties to also invest in this project, which is planned as a city built using green and environmentally friendly technology,” al-Dhaheri told the Jakarta Post.
The capital city recently lost a major investor after Japan’s Softbank Group withdrew from the project, citing an insufficient return on investment. Indonesia has since turned to the UAE and Saudi Arabia to inject more money into the project.
Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan claimed on March 15 that the UAE was willing to invest at least $20 billion through the INA.
The UAE embassy neither confirmed nor denied Luhut’s claim.
Al-Dhaheri added that the UAE was willing to advise and assist in the planning of the new capital and in building key components such as data centres.
“The government and private investors from the UAE will be keen to evaluate potential investments in the new capital in energy and infrastructure in collaboration with INA and the new capital authority,” he said.
The UAE and Indonesian companies have signed several business deals over the past few years. These include deals between arms manufacturers PT Pindad and Caracal International LLC, oil and gas producers Pertamina and Adnoc, logistics firm DP World and conglomerate Maspion Group.
The Nusantara National Capital Authority (NNCA) also plans to use crowdfunding to finance developing the new capital.
NNCA spokesperson Sidik Pramono said in a statement on March 25 that crowdfunding was one of many “creative financing” methods to be used to fund the project, including through philanthropists and corporate social responsibility programmes.
“This is a fundraising event that involves many people. It is similar in nature to a donation. It is voluntary, without force and initiated by the community,” he said.
Indonesia’s new capital city project requires almost $32.6 billion with only one-fifth of the amount coming from the state budget, leaving the rest up to the appetite of private sectors.
THE JAKARTA POST/ASIA NEWS NETWORK