On 11 July 2024, President Joko Widodo enacted Presidential Regulation No. 75 of 2024 to accelerate the development of Nusantara Capital City (IKN). The Presidential Regulation is designed to facilitate the expeditious development of facilities and infrastructure, including housing, health, and educational facilities.
In the Presidential Regulation, the Head of the IKN Authority is empowered to utilize the State Budget (APBN) to implement accelerated development. The government will provide a maximum of two cycles of land management rights. Upon the conclusion of the initial cycle, the government may assess the willingness of business actors to proceed to the subsequent cycle. Furthermore, the head of the IKN Authority is empowered to determine the Land Use Rights (HGU) throughout two cycles, with a maximum duration of 190 years.
It is established that the development of IKN using APBN is solely intended for constructing core buildings, such as the center of government, and for providing surrounding facilities to be obtained from the private sector or investors. It is anticipated that this presidential regulation will encourage a greater number of investors, both domestic and international.
As indicated by data from the Deputy for Funding and Investment of the Nusantara Capital City Authority (OIKN), by December 2023, 23 local investors had entered the market, with an investment value of Rp 41 trillion. Concurrently, several overseas investors have also made their way into the market. These foreign investors enter via the Government Cooperation with Business Entities (KPBU) scheme. These investors are among the parties responsible for initiating the construction of 166 towers and 159 landed houses in IKN, with an indicated capital expenditure (capex) value of IDR 55 trillion.
In Presidential Regulation 75 of 2024, in addition to HGU, the length of Building Rights Title (HGB) and use rights are also regulated with the same scheme, namely two cycles with a period of up to 160 years. The aforementioned foreign investors are to construct ASN residences and other edifices, including towers. Furthermore, they will also engage in the six categories of IKN initiative projects as smart cities. They will be selected for technology transfer to construct urban systems, such as smart management for buildings and various facilities, water, waste, and energy. Additionally, they will facilitate the implementation of government services, including e-citizen platforms, centralized public databases, and data-driven urban planning.
It is anticipated that this presidential regulation will encourage foreign investors to enter the market to accelerate the development of IKN. Market Entry Indonesia is well-positioned to facilitate investment in IKN due to its extensive experience in the sector. We offer comprehensive services, including investing in IKN. Our extensive listings cover all investment preferences.
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