Goods and services, energy companies make up highest in LoIs for IKN

31 May 2023


Out of the 209 Letters of Interests (LoI) received by the New Capital City Nusantara Authority (OIKN) from companies interested in investing in the US$33 billion project as of May 2023, companies operating in the fields of goods and services, energy development, and technology make up the largest number of interested parties. 


According to data from PT Bina Karya, the company that oversees all incoming investment in the new capital city, companies with the highest number of LoIs come from the sectors of Goods and Services (32), Energy Development (26), and Technology (24). The latter two sectors gained significant interest particularly due to the government's intensity in promoting the creation of a resilient, green, and smart city. 


“We have goals in 2045 to make Nusantara a net zero emission city,” said Selly Indrawati, Head of Business Development and Engineering Industry Investment at Bina Karya, during an info Session held to introduce the procurement process for the IKN project held by the German-Indonesian Chamber of Commerce and Industry (EKONID) in Jakarta on Thursday, May 25, 2023. 


At the info session, which was held in cooperation with OIKN and the National Public Procurement Agency (LKPP), Ms. Indrawati highlighted the eleven sectors that are highly sought out by the project, namely Basic Infrastructure, Energy Development, Transportation, Smart City and Digital Hub, Education, Sustainable Agri Industries, Integrated Pharmaceuticals, Inclusive Eco-Tourism and Wellness, Advanced Chemicals, Next Gen Renewable Manufacturing, and Disruptive Low Carbon.  


Consequently, industrial zone, connectivity, and office infrastructure were the areas with the least number of LoIs, with only 12 letters received from within the three sectors. 


Also at the info session, Antonius Lambok Sihombing, the Deputy Director at LKPP, talked about regulations relevant to procurement activities in IKN. He highlighted how the Indonesian government had executed significant transformation for easing business barriers and improving cooperation effectiveness for the IKN project. 


The IKN project, essentially a relocation of the country’s capital city from Jakarta in the island of Java to a new area to be called Nusantara in the island of Kalimantan, was jumpstarted by President Joko “Jokowi” Widodo in 2019. Following his announcement, President Jokowi declared a portion of Kalimantan's Kutai Kartanegara and North Penajam Paser Regencies as the site of the nation's future capital in August of the same year. 


Additionally, the OIKN has prepared around 300 investment packages that will be offered to domestic and overseas investors for the development of Nusantara. 

In a press release received on Friday, head of OIKN Bambang Susantono said the investment packages are intended for the construction of housing, transportation, and energy infrastructure. 


The OIKN head said that the participation of the private sector in the establishment of the IKN can be realized through public-private partnership (KPBU), direct investment, as well as creative financing, such as crowdfunding, carbon trading, and philanthropy, among others. 


“Investments are not only required to build the physical facilities in the city, but also the digital technology and systems to make Nusantara a smart city,” he said, as quoted by Antaranews.