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UAE to fund Indonesia’s new capital project

The United Arab Emirates (UAE) will fund the new state capital (IKN) project in Indonesia’s East Kalimantan through an investment of 10 billion USD, according to Investment Minister and head of the Indonesian Investment Coordinating Board (BKPM) Bahlil Lahadalia.
UAE to fund Indonesia’s new capital project ảnh 1Investment Minister and head of the Indonesian Investment Coordinating Board (BKPM) Bahlil Lahadalia (Photo: Instagram @bahlillahadalia)
Jakarta (VNA) - The United Arab Emirates (UAE) will fund the newstate capital (IKN) project in Indonesia’s East Kalimantan through aninvestment of 10 billion USD, according to Investment Minister and head of the Indonesian Investment Coordinating Board (BKPM) BahlilLahadalia.

Speaking at a virtual press conference onNovember 11, Bahlil said the investment was part of the UAE's investmentcommitment to Indonesia with a total value of 44.6 billion USD as stated in thememorandum of understanding (MoU) with the Indonesian government.

The UAE's investment commitment to IKN will be implemented throughthe Indonesian Investment Authority (INA) – Indonesia's newly-establishednational investment fund. The INA will also manage about 18 billion USD out of 44.6billion USD committed by the UAE.

Minister Bahlil said that the UAE side may be interested in allocating itscapital to construction projects at IKN, as well as information technologyprojects and green industrial parks.

Previously, Indonesian President Joko Widodo repeatedly lobbied the UAE todisburse investment capital to the IKN project. 

According to estimates by the Indonesian government, the totalbudget for developing IKN is up to 33.7 billion USD, of which only 19.2 percentcomes from the state budget, 54.4 percent from public-private partnerships(PPPs), and the remaining 26.4 percent from the private sector.

The Indonesian House of Representatives is considering a draftlaw on IKN, which outlines how the government will organise and manage phasesof development, and mobilise investment capital for this project./.
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