Pramono Claims Jakarta Has Already Obtained a Principle Approval to Issue Regional Bonds 

DKI Jakarta Governor Pramono Anung/PHOTO: Diah Ayu-VOI

JAKARTA - DKI Jakarta Governor Pramono Anung claims that the DKI Jakarta Provincial Government has obtained the principle approval from the central government, namely the Coordinating Ministry for Economic Affairs to continue the plan to issue regional bonds.

According to the plan, Jakarta will issue debt securities worth Rp3.5 trillion in 2027. The financing instrument is said to be one of the alternative sources of funding outside the APBD. Pramono said this step could not be taken without the approval of the central government.

"In principle, the DKI Jakarta Government is not possible for us to take this step without the approval of the central government. One of the principle approvals we received was from the Coordinating Minister for the Economy," said Pramono at the DKI Jakarta City Hall, Tuesday, August 4.

However, the DKI Provincial Government still has to apply for permits to issue regional bonds from the Ministry of Home Affairs, the Ministry of Finance, and Bappenas.

Pramono assessed that regional bonds were one of the financing options that needed to be developed amid the fiscal challenges of local governments. According to him, increasing the capacity of the Regional Budget could no longer rely on conventional ways.

"However, in this economic condition, the challenge to be able to increase the APBD cannot be in a conventional way, there must be something called out of the box," said Pramono.

Pramono also claimed that Jakarta's fiscal capacity was still strong enough to issue regional bonds.

"Jakarta has the ability to issue bonds up to Rp. 20 trillion, but we only use Rp. 3.5 trillion. So it's still very safe for Jakarta and that's what worries me, it will be a burden on the next government, it won't happen," he explained.

This statement was made by Pramono after receiving a visit from Bali Governor I Wayan Koster and Badung Regent I Wayan Adi Arnawa. The meeting discussed various creative financing schemes, including regional bonds, airspace utilization, KLB (Building Floor Coefficient), and cooperation with the private sector.

Meanwhile, Bali Governor I Wayan Koster said his party was studying a number of financing initiatives that are being developed by Jakarta, especially those related to accelerating infrastructure development.

"I got a picture from the Governor of DKI that a number of initiatives were carried out which we will study, there are several things that can be applied in Bali, especially those related to the use of airspace, building height, and also cooperation with private parties that can be involved in participation in the development of infrastructure to accelerate infrastructure in order to improve the quality of Bali tourism," explained Koster.

Adding, Badung Regent I Wayan Adi Arnawa said his area needed long-term financing to overcome the congestion problem, which is one of the main obstacles to the tourism sector.

One of them, Badung plans to build a new road to the Uluwatu area with a budget requirement of around Rp2.9 trillion, most of which is financed through a loan scheme.

"That is why we are opening ourselves to move towards regional bonds. Because if I look at it, with the DSCR (debt service coverage ratio) we have in Badung, it seems to meet the requirements," explained Adi Arnawa.

Adi Arnawa hopes that the regional bond scheme can become a new financing instrument to accelerate infrastructure development in Bali, especially in Badung Regency.