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Sun 19 Jan 2020 08:58 AM

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SoftBank offers to invest $40 billion in Indonesia's capital

Indonesia is set to begin construction of a new capital on Borneo island later this year

SoftBank offers to invest $40 billion in Indonesia's capital

The size of the investment proposal from the Japanese company is puzzling as Indonesia has estimated the total cost of building the new capital from the scratch at about $34 billion. 

Image: AFP/Getty Images

SoftBank Group Corp. offered to invest $30 billion to $40 billion toward the development of a new Indonesian capital, a senior member of President Joko Widodo’s cabinet has said.

SoftBank chief executive officer and founder Masayoshi Son met Jokowi, as the head of state is popularly known, in Jakarta last week and expressed his interest in joining the project. The billionaire has already been appointed to the steering committee overseeing the city’s construction.

“I will meet Masayoshi in Davos and then Tokyo,” Coordinating Minister for Maritime Affairs and Investments Luhut Pandjaitan told a news conference in Jakarta. The “president will decide on the matter in February.”

The size of the investment proposal from the Japanese company is puzzling as Indonesia has estimated the total cost of building the new capital from the scratch at about $34 billion.

SoftBank said in an emailed statement later Friday that the company hasn’t disclosed actual numbers. In 2018, the company signed a memorandum of understanding to support a planned $200 billion solar project in Saudi Arabia. SoftBank and the Public Investment Fund have said they’re continuing to collaborate on solar energy plans after the Wall Street Journal said the project was put on hold.

Indonesia is set to begin construction of a new capital on Borneo island later this year as Jokowi seeks to decongest a fast-sinking Jakarta. Son joins a long list of global investors keen to participate in the relocation project.

The new city will sport world-class educational institutions, modern hospitals, botanical gardens and an environmentally-friendly transportation system, according to officials. Investors from China, the Middle East and the US have shown interest in developing the city, Pandjaitan has said.

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