IKN funding could reach up to Rp30 trillion in 2023: ministry

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The fund allocation for the new capital city (IKN), Nusantara, could reach Rp27 trillion to Rp30 trillion, the Ministry of Finance has informed.

The funds will be directed toward the construction of the first phase of the Central Government Core Area (KIPP), it added.

“The State Budget will take place in the IKN Nusantara financing but we will make creative financing as well,” Deputy Finance Minister Suahasil Nazara announced at the 2022 Central Development Coordination Meeting in Jakarta on Thursday.

For financing the development of IKN Nusantara, the Finance Ministry will prepare a Government-Business Entity Cooperation (PPP) scheme and various other financing schemes from other non-State Budget sources.

The Ministry of Finance said that the first phase of IKN Nusantara’s development will focus on KIPP development and consist of building basic infrastructures, such as housing, drinking water or clean water networks, sanitation networks, and connectivity in the form of access roads, toll roads, and KIPP roads, as well as government buildings such as palaces and offices.

Facilities for supporting connectivity, such as bus terminals, ports, and airports, and infrastructure for education and health, defense and security facilities, operational facilities to coordinate the IKN’s preparation and development, as well as support for energy, electricity, and information and communication technology will also be set up.

Nazara listed five strategic focuses for IKN Nusantara’s development. First, increasing the distribution of development since 58 percent of the gross domestic product (GDP) is contributed by Java. Therefore, the government has decided to change the Java-centric mindset to Indonesia-centric.

Second, building environmentally-friendly landscapes and transportation systems through smart cities and green cities.

Third, preparing creative financing, including Public-Private Partnership (PPP) schemes, forwarding state sharia securities (SBSN), empowering Investment Financing Institutions (INA), as well as crowdfunding and philanthropy.

The fourth strategic focus is creating new sources of growth through large investments by 2045, while driving consumption activities and other sectors such as property and financial services.

The fifth is bringing about the digital transformation of government through the introduction of a digital-based government system.

Source: Antara News