Will China invest in Indonesia's new capital Nusantara?

A computer-generated image of Indonesia's new presidential palace in the new capital of Nusantara in East Kalimantan. PHOTO: AFP/NYOMAN NUARTA

The Indonesian government is pushing ahead with its plan to build a new capital city on Borneo island. The new capital, which is named "Nusantara" (meaning archipelago), will be located on 256,000 hectares of land in the North Penajam Paser and Kutai Kartanegara regencies in East Kalimantan province, which are about 2,000 km from Jakarta.

The project will cost 466 trillion rupiah (S$44 billion), of which the state can cover only about one-fifth of the investment cost. Around 80 per cent of the total investment value needs to be sought from public-private partnerships and investments.

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