JAKARTA – New agreements inked in Singapore last week reflect how there has been more interest in investments for Indonesia’s upcoming capital Nusantara, experts told The Straits Times.

They added that more substantive updates to investments for the new city in East Kalimantan, Borneo, will likely come after the archipelago heads to the polls in 2024.

Their comments were made after at least two companies signed non-disclosure agreements in Singapore last Thursday to work on projects in Nusantara, following Indonesia’s increasing efforts to market its new city.

ST has learnt that the State Power Investment Corporation (SPIC), one of the top five electricity generation companies in China, and Joe Green, a construction company from Singapore, signed these agreements with the Nusantara National Capital Authority (OIKN).

The agreements were signed at Ecosperity Week, Temasek’s annual sustainability event, which was held last Tuesday to last Thursday at the Sands Expo and Convention Centre.

Indonesian President Joko Widodo attended the event last Wednesday, where he made a strong pitch for investment in the nation’s upcoming new capital Nusantara, days after Singapore investors visited the site in a roadshow for the city, the first in a series of roadshows that the archipelago plans to organise.

More than 130 government officials and businessmen from Singapore participated in the roadshow from May 30 to June 1 to explore opportunities in Nusantara.

Bank Permata economist Josua Pardede said that the two agreements signed signal a deeper sense of commitment from foreign investors for Nusantara.

Noting that both the companies that signed the agreements are involved in sustainable energy, Mr Pardede said the signings reflect how the upcoming city is moving towards achieving its aim of becoming smart and green.

“If the investments continue (to come) in the future, then the development of green energy in the new capital city would be better than others in the region,” he said, adding that more investments for Nusantara will likely come after Indonesia’s general election in February 2024.

ST understands that representatives from SPIC and Joe Green were part of the roadshow, and that the two companies will be working on projects related to renewable energy and waste management.

Mr Dedi Dinarto, lead Indonesia analyst at public policy advisory firm Global Counsel, agrees that there would be interest in Nusantara after the country heads to the polls, and that the signing of the two agreements last week represents ongoing interest in the city.

But nothing is certain, he added.

“The non-disclosure agreements, memoranda of understanding, and other temporary agreements are simply meant to bind the two parties during the negotiation phase, but they do not guarantee eventual investment commitment,” said Mr Dedi, referring to how other agreements have been signed in the past.

“In my opinion, we can only witness genuine commitment from investors, particularly foreign ones, after Indonesia’s general election scheduled for February 2024.”

Indonesia’s Ambassador to Singapore Suryo Pratomo told ST that he was grateful for the recent agreements, and that they will not only increase public trust in his country’s plans, but also attract other businessmen to invest in Nusantara.

“The President emphasised that the task of the Indonesian Embassy is to facilitate (investments). Finally, the decision to realise the investment plan is in the hands of OIKN. It is hoped that the two non-disclosure agreement signings will be followed by signings with other investors,” he said.

Following the signing of these agreements, the next steps would be to exchange data with the Indonesian authorities to formulate a feasibility study on work that could be done in the area.

The 2,561 sq km Nusantara city, about three times the size of Singapore, was announced three years ago by Mr Widodo. The state will bear 20 per cent of the cost of building it, while Indonesia hopes the private sector will foot the rest.

The new capital is scheduled to be inaugurated in 2024, when Indonesia celebrates its 79th anniversary of independence on Aug 17.