Foreign Investors Haven't Groundbreaking In IKN, Authority: Not Priority

Construction of the IKN Nusantara/DOCUMENTATION INDONESIA area BETWEEN

JAKARTA - The groundbreaking activity at IKN by domestic private investors has been carried out in three stages throughout 2023. This also marks the start of the construction of a number of projects at IKN.

Even so, the Archipelago Capital Authority (OIKN) does not deny that there are no foreign investors conducting groundbreakings towards the end of this year. Therefore, foreign investors are still limited to conveying their investment interests and have not realized them.

Deputy for Funding and Investment at OIKN Agung assessed that the entry of foreign investors to IKN was not due to lack of interest, but because it was not a priority for the government.

The reason is that local investors are considered to be able to invest first by considering the land aspect that is close to the city center.

"Regarding foreign investors who directly grounded us following the president's direction, we prioritized domestic investors first because everything can be done by domestic investors and they can partner with foreign investors," Agung said in a virtual press conference, quoted on Saturday, December 30.

"So, for me this is not a priority compared to domestic investors," he continued.

Nevertheless, Agung assessed that until now foreign investors are quite interested in working on the Business Administration Cooperation (PPP) project. This is because the KPBU scheme has a lower risk than direct investment, because the risk aspect is divided into the government.

"For foreign investors, what we see as the most potential is entering KPBU because we also don't want foreign investors who come in to only offer goods and services or become vendors alone, we want them to enter really as investors," he said.

In addition, Agung revealed that currently foreign investors have longer to analyze the macroeconomics in Indonesia and also consider incentive offers from the government.

"Regarding requests from potential investors, I can see that the current incentives are quite attractive, they ask a lot about that," he said.

According to Agung, domestic investors already understand the existing regulations in Indonesia. Meanwhile, foreign investors are a careful consideration.

"Therefore, we are deploying various existing regulations, derivatives of the new IKN Law until the end of this year and also at the beginning of next year, be it the Minister of Finance Regulation, the OIKN Chief Regulation is being reduced in detail from incentives," he concluded.