Jakarta Wants to Issue Regional Bonds of Rp5.2 Trillion, Pramono: It Can Be a Role Model for Other Regions 

DKI Jakarta Governor Pramono Anung

JAKARTA - DKI Jakarta Governor Pramono Anung considers the plan to issue regional bonds worth Rp5.2 trillion in 2027 could be a role model for other local governments. According to him, the financing scheme through regional debt letters can be an alternative to support development while maintaining the fiscal health of the region.

"I believe that later if Jakarta launches it, this model will be a role model for other regions and I believe it will have a positive impact on Jakarta's finances as well," said Pramono in South Jakarta, Thursday, August 6.

Initially, the DKI Provincial Government planned to issue bonds worth Rp3.5 trillion. Later, there was an increase in the need for funding to continue the construction of the Jakarta LRT with the Manggarai-Dukuh Atas route so that the total value of the bonds needed was Rp5.2 trillion.

Currently, the DKI Provincial Government is still processing the permit to the central government before the regional bonds are launched. Pramono targets the issuance of the debt instrument to be carried out in June 2027.

He emphasized that Jakarta's financial condition is still strong enough to manage and repay regional bonds. However, the DKI Provincial Government chose to limit the value of bond issuance so as not to burden the next government.

"Jakarta's finances are actually very healthy. We can do up to Rp20 trillion for that, but so that the finances remain healthy and what is a concern, one of them from the Minister of Home Affairs, is that this should not become a burden for the Governor after this, I then decided that the maximum is in the figure of Rp5.2 trillion," he said.

According to him, the issuance of regional bonds by Jakarta can serve as an example for other regions in seeking sources of development financing.

Before deciding to issue bonds, the DKI Provincial Government has also discussed with a number of international institutions that have experience in financing cities through bond instruments.

"Of course, the DKI Jakarta Government before deciding to launch the bonds, which is planned for June next year, we will certainly listen, ask for advice, discuss with credible institutions that are used to issuing bonds for cities in the world," explained Pramono.

In addition to the LRT development, bond funds will also be allocated for the health and social sectors, including the construction of an international-standard hospital in Jakarta.

"The figure is approximately Rp5.2 trillion. It is used for two things, (namely) completing the LRT from Manggarai to Dukuh Atas, then completing things related to health and social. because the DKI Jakarta government will build an international hospital," added Pramono.