Germany backs USD 250 Million Surabaya Rail Project Set For Construction Next Year

Germany is backing the first phase of Indonesia’s Surabaya Regional Railway Line (SRRL) project with 236 million euros (US$256 million) in financing, as the country prepares to begin construction of the commuter rail line next year.

The initiative, part of the European Union's broader Global Gateway strategy, aims to develop the Greater Surabaya commuter corridor into the region’s first electrified rail line.

"We are proud to contribute to Indonesia's sustainable mobility ambitions through initiatives such as the Surabaya Regional Railway Line," designated Deputy Head of Mission at the German Embassy in Jakarta Oliver Sperling said in a statement on Wednesday.

Sperling said Germany and Indonesia had built a long-standing partnership in transport infrastructure and that German and European companies stood ready to support Indonesia's transition toward climate-resilient transport systems by bringing engineering expertise, innovative technologies and long-lasting infrastructure solutions.

The financing, provided through Germany's state-owned KfW Development Bank will fund the first phase of the Surabaya Regional Railway Line (SRRL), which aims to modernize, double-track and fully electrify the commuter corridor linking Surabaya with neighboring Sidoarjo.

The financing package comprises a concessional loan of approximately 230 million euros and a 6-million-euro technical assistance grant from KfW, alongside counterpart funding from the Indonesian government.

It is currently undergoing detailed engineering design and procurement, with construction expected to begin between 2027 and 2028.

The SRRL is among the country’s priority infrastructure projects under the 2025-2029 national development plan for the Greater Surabaya metropolitan area. Its first phase will cover a roughly 37-kilometer section connecting Surabaya Gubeng Station with Sidoarjo Station.

Once operational, the upgraded railway is expected to serve more than 200,000 passengers daily and benefit over 1.3 million residents within its first two years.

“Sustainable transport is fundamental to Indonesia's economic growth, connectivity and green transition,” said Denis Chaibi, ambassador of the EU to Indonesia and Brunei Darussalam. 

Chaibi said the railway project reflects the EU’s Global Gateway strategy, under which the bloc seeks to mobilize high-quality investment, share European expertise and build long-term partnerships for resilient, low-carbon infrastructure in partner countries.

The SRRL has entered the detailed engineering design (DED) stage and is expected to move into procurement in early 2027, East Java Vice Governor Emil Elestianto Dardak said in his Instagram post on Wednesday.

The DED, being prepared by Japanese engineering consultant Chodai, involves producing detailed technical plans for the project, including station designs, the double-track railway alignment, electrification systems and supporting infrastructure.

Emil said the Surabaya-Sidoarjo section is the only corridor in northern and southern East Java that has yet to be double-tracked, despite serving the Greater Surabaya metropolitan area, home to around 10 million people.

"President Prabowo Subianto has given the clearance for it to proceed. […] The double track is needed because it will allow multiple rail services to operate simultaneously," Emil said.

He also said construction would prioritize land that has already been cleared for development, while local governments are preparing supporting spatial planning as part of the project’s implementation.

Source: The Jakarta Post

Indonesia's INA Ranks Second in Asia for Sovereign Wealth Governance

Indonesia Investment Authority (INA) ranked second among Asia's sovereign wealth funds for governance, sustainability, and institutional resilience in the 2026 Governance, Sustainability and Resilience (GSR) Scoreboard released by Global SWF.

INA earned an overall score of 92 percent, placing just behind Singapore's Temasek Holdings and underscoring growing international recognition of its governance standards and institutional credibility.

INA received 9 out of 10 points for governance, 9 out of 10 for sustainability, and a perfect 5 out of 5 for resilience in the independent assessment conducted by Global SWF.

Chair of the Board of Directors of Indonesia Investment Authority Oki Ramadhana said the recognition comes at a time when governance and institutional credibility have become increasingly important to investors amid global uncertainty and geopolitical tensions.

"Amid uncertainty, geopolitical tensions, and changes in the global economic environment, the GSR Scoreboard has become increasingly important for any institution seeking to attract investment, especially for INA, whose mandate is to bring both domestic and foreign investment into Indonesia," Oki told a press conference in Jakarta on Tuesday.

He said global investors no longer evaluate sovereign wealth funds solely by the size of their assets or investment portfolios, but also by governance quality, transparency, investment discipline, and institutional resilience.

According to Oki, the GSR Scoreboard assesses about 25 indicators covering governance, sustainability, and institutional resilience, making it an important benchmark for investors seeking credible investment partners.

"What matters most is governance. Our international investment partners view governance as the primary factor when selecting partners to invest in Indonesia," he said.

Oki said the achievement is expected to strengthen global investor confidence in Indonesia and encourage greater investment into the country's economy.

Global SWF is an independent research platform that monitors about 200 sovereign wealth funds and public pension funds worldwide by assessing governance, sustainability, and institutional resilience based on publicly available information.

Since its establishment in 2021, INA has steadily improved its GSR Scoreboard performance, increasing its score from 24 percent in 2021 to 52 percent in 2022, 56 percent in 2023, 60 percent in 2024, 68 percent in 2025, and 92 percent in 2026.

Source: ANTARA News

Bank Indonesia Prioritizes Rupiah Stability and Inflation Amid Global Uncertainty

Bank Indonesia (BI) will continue to prioritize rupiah stability and inflation control while supporting economic growth, Acting Governor Destry Damayanti said on Friday, as global financial uncertainty continues to weigh on emerging markets.

Destry said uncertainty remains elevated even though the US Federal Reserve has signaled that it is unlikely to raise interest rates further, as financial markets expect borrowing costs to remain high for longer.

"The environment of high interest rates and elevated US Treasury yields will continue to affect emerging markets such as Indonesia. Naturally, this will influence Bank Indonesia's policy decisions," she said during a meeting with journalists in Simalungun, North Sumatra.

She said maintaining rupiah stability and keeping inflation under control remain the central bank's immediate priorities. Reflecting that assessment, BI kept its benchmark BI-Rate unchanged at 5.75% at its July 21–22 policy meeting.

"We are still monitoring volatility in domestic financial assets, including government bonds and Bank Indonesia Rupiah Securities (SRBI). We are also closely watching food inflation," Destry said.

She added that Indonesia needs sustained foreign capital inflows to help stabilize the rupiah. Following a cumulative 100-basis-point increase in the BI-Rate during May and June, foreign inflows into government bonds and SRBI reached Rp 195 trillion (about $10 billion) this week, she said.

"These inflows are crucial for strengthening our foreign exchange reserves and enabling us to manage the rupiah more effectively," she said.

Beyond monetary policy, Destry said BI continues to work with the government to curb food inflation through programs that improve supply and stabilize prices.

Among the initiatives is a nationwide food price stabilization campaign, including subsidized food markets that sell staple goods -- particularly rice -- below prevailing market prices.

Source: Jakarta Globe