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.
Investment Minister and head of the Indonesian Investment Coordinating Board (BKPM) Bahlil Lahadalia (Photo: Instagram @bahlillahadalia)Speaking at a virtual press conference on November 11, Bahlil said the investment was part of the UAE's investment commitment to Indonesia with a total value of 44.6 billion USD as stated in the memorandum of understanding (MoU) with the Indonesian government.
The UAE's investment commitment to IKN will be implemented through the Indonesian Investment Authority (INA) – Indonesia's newly-established national investment fund. The INA will also manage about 18 billion USD out of 44.6 billion USD committed by the UAE.
Minister Bahlil said that the UAE side may be interested in allocating its capital to construction projects at IKN, as well as information technology projects and green industrial parks.
Previously, Indonesian President Joko Widodo repeatedly lobbied the UAE to disburse investment capital to the IKN project.
According to estimates by the Indonesian government, the total budget for developing IKN is up to 33.7 billion USD, of which only 19.2 percent comes 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 draft law on IKN, which outlines how the government will organise and manage phases of development, and mobilise investment capital for this project./.
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