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Softbank offers to invest USD 40 billion in Indonesia’s new capital

The construction of the new capital will start later this year.

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Indonesia’s coordinating minister for maritime affairs and investments Luhut Pandjaitan said that Japanese conglomerate Softbank offered to cover the cost of Indonesia’s new capital city development, which would likely reach USD 30 to 40 billion, according to Bloomberg. The new capital will be located in East Kalimantan Province, the Indonesian part of Borneo island.

The statement followed Softbank CEO Masayoshi Son’s visit in Jakarta last week to meet President Joko Widodo. During the encounter, where Grab’s CEO and co-founder Anthony Tan was also present, Son expressed his interest to fund the new “Jakarta.”

Pandjaitan said the president will announce his final decision on this matter in February.

The construction of the new capital will start later this year, and the transfer is planned to begin in 2024. The modern new capital on Borneo island will employ a smart city concept with green technologies and artificial intelligence to enhance the performance of urban services.

According to the minister of national development planning Suharso Monoarfa, investors from the Middle East, the US, Germany, and the UK have also shown interest in backing this mega project.

The funding would be Softbank’s second major investment in Indonesia after it committed USD 2 billion to Grab Indonesia last year. During Son’s visit to Indonesia in August 2019, he said that his firm would pour USD 5 billion into the country, including an amount for electric vehicle development.