Chinese and Russian firms among first foreign investors in Indonesia’s new capital Nusantara with mixed-use building projects

JAKARTA: Multi-million dollar construction deals by major Chinese and Russian firms have officially launched in Indonesia’s Nusantara, President Joko Widodo said, marking a pivotal moment for the new capital city which had previously struggled to secure international funding. 

The projects – spanning property, hospitality and education developments – were officiated by Mr Widodo at an inauguration ceremony held on Wednesday (Sep 25). 

“We aim to build a strong and sustainable ecosystem in Nusantara, ensuring it becomes an attractive investment destination,” Mr Widodo said in comments carried by the Antara news agency. “This shows the trust of investors, both local, domestic, and international, that Nusantara is a very attractive place for investment.” 

Minister of Tourism and Creative Economy, Sandiaga Uno, expressed optimism about the new investments, saying they could encourage more international investments that would create more jobs and business opportunities across Indonesia.

China’s inaugural property project in Nusantara will be spearheaded by the Delonix Group, a leading Chinese tourism and hospitality firm with investments of 500 billion rupiah (US$32.5 million). The planned 2.42-hectare integrated complex will consist of a hotel with 200 rooms, luxury apartments, shopping malls, offices and sports facilities.  

Russia’s Magnum Estate International, a leading developer of luxury real estate in Bali, will launch a 1.3 hectare integrated resort complex housing serviced apartments and commercial spaces, with similar estimated costs of up to 500 billion rupiah. 

An international educational facility, catering to 750 students from pre-school education to high school, will be developed by Australia’s AIS which runs numerous overseas Australian curriculum international schools. 

Costing 150 billion rupiah (US$9.8 million), the new campus will feature performing arts spaces, an indoor amphitheatre and a semi Olympic-sized swimming pool and showcase cutting-edge science laboratories and STEM facilities. 

Nusantara has been widely seen as Mr Widodo’s legacy.

His presidential term will end on Oct 20. 

In 2019, he made the decision to move Indonesia’s capital from Jakarta, a bustling but sinking and congested megacity. But concerns were raised about the project’s viability and how inclusive and beneficial the new capital city would be.  

President-elect Prabowo Subianto has pledged to continue building Nusantara after taking office in October. 

Nusantara could see more groundbreaking projects, Mr Widodo said. “In a week, we might see other investors ready to start new projects,” he said, adding that many more investors had also submitted proposals and letters of intent. 

Separately, government facilities, funded through state budgets, were still under construction, he said. 

Other projects inaugurated in Nusantara have mainly been hotels in development with Indonesian firms.