Regional Bonds Called Solutions For Alternative Financing Of Regional Governments

Deputy Chairman of the Indonesian Regional Representative Council (DPD), Tamsil Linrung encourages the issuance of municipal bonds or regional bonds as an alternative financing instrument for local governments (Pemda) to reduce dependence on the state budget.

"DPD invites and facilitates local governments to issue regional bonds as self-contained development solutions and does not depend on the state budget," he said in a written statement, Sunday, August 17, 2025.

According to him, many regions in Indonesia have significant economic potential to support the issuance of regional bonds. This potential can be realized through regional asset management (underline assets) and sustainable productive business projects. He gave an example, in the energy sector, regions can use the Hydroelectric Power Plant (PLTA) to supply electricity that can be developed into an attractive business project for investors.

Tamsil revealed that the government has prepared regulations that support the issuance of municipal bonds, so that there are no fundamental obstacles from the market and legal side. The market for regional bonds is very open, and regulations are already available. This is a great opportunity for local governments to develop creative financing that involves the public," he added.

The Deputy Chairperson of the DPD for Economic and Development stated that the push for the issuance of regional bonds is in line with the spirit of regional fiscal independence emphasized by President Prabowo Subianto. Because, with regional bonds, local governments can manage strategic projects such as infrastructure, energy, or natural resource management without having to wait for the allocation of funds from the APBN.

Apart from hydropower, Tamsil continued, the tourism, agriculture, and waste management sectors can also be productive projects that attract investors. Therefore, local governments must dare to innovate, considering that through good asset management and feasible projects, regional bonds can become game changers in regional development.

He emphasized that the DPD RI will continue to facilitate local governments through socialization, training, and technical assistance to ensure that regional bond issuance runs smoothly. "We want local governments not only to see regional bonds as an alternative, but as the main strategy to accelerate sustainable development," concluded Tamsil Linrung.