Indonesia’s New Capital Nusantara: $35 Billion Project Faces Massive Delays and Funding Challenges

For starters, it's a long, long way from being finished. Although Widodo began working from the city two weeks ago, many estimates say the new capital won't be fully operational until the 2040s. Most of the core infrastructure is unfinished while many key projects have not been started yet. Construction delays have been a constant problem. Located deep within the jungle on the island of Borneo, known as Kalimantan in Indonesia, it remains a mass of construction sites. The cost has been estimated at around $35 billion (€31.76 billion) but the government's plan is for private investment to fund around 80% of that total amount. The country's finance minister Sri Mulyani told DW's recent Business Beyond program on Indonesia's economy that the government had spent 72 trillion Indonesian rupiah ($4.5 billion, €4.08 billion) on Nusantara over the past three years. She added that the key to financing it is establishing meaningful incentives for private investors, including significant tax breaks. Recently, Widodo announced that investors would have land rights for up to 190 years in the capital.


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