Indonesia's President Jokowi inaugurated a $33 million project by China's Delonix Group in Nusantara, marking the first foreign investment in the new capital.

What does this mean?

President Jokowi broke ground on a property complex by Chinese firm Delonix Group on September 25, 2024, signaling a significant step for Nusantara, Indonesia's new capital on Borneo. Delonix's investment of 500 billion rupiah ($33 million) is the first foreign infusion into the ambitious city project. This is expected to bolster investor confidence, crucial for the $32 billion project that's faced construction delays and a lack of international backers. The government has only covered a fifth of the total cost, relying heavily on private investment to realize its vision. Previously, Nusantara secured a $1.3 billion boost from Indonesian companies, highlighting a growing but still tentative domestic interest.

Delonix Group spearheading foreign investment in Nusantara could turn the tide for the new capital's funding challenges. With President Jokowi setting a precedent, other international investors might follow suit, providing the crucial private capital needed to hit the $32 billion mark. Investors should watch for increased activity in Indonesia's real estate and construction sectors, potentially sparking broader market optimism.

The bigger picture: Vision meets reality.

Building a completely new capital is no small feat, and Indonesia's struggles highlight the sheer scale of such projects. This move isn't just about Nusantara; it's about showcasing Indonesia's potential to compete on the global stage and attract significant foreign investment. With President-elect Prabowo Subianto taking office soon, his administration's approach to continuing this project will be pivotal for Indonesia's economic and infrastructural future.