Conference at Hannover Messe 2023: Invest in the Capital City (IKN) of Nusantara

Conference at Hannover Messe 2023: Invest in the Capital City (IKN) of Nusantara

The Government of Indonesia has been examining the proposal to relocate the Capital City (IKN) of the Republic of Indonesia for a long time. The relocation plan of the IKN, now still in Jakarta,  from Java island to the island of Borneo has been studied with an in-depth analysis by the government. This is because it considers possibilities for new urban development design models and sustainability concerns into account for the future.

“The need to relocate IKN is urgent due to factors such as population equality, economic growth outside of Java, the clean water crisis on Java, high land conversion on Java, the concentration of urbanization in Jakarta, and a reduction in Jakarta's economic capability and potential,” said the Director General of Cipta Karya Ministry of Public Works and Public Housing ( The PUPR Ministry) Diana Kusumastuti in the Conference session with the theme "Investing in the New Capital City", held in the Indonesian Pavilion at the Hannover Messe 2023 industrial exhibition, Tuesday (18/4) Hannover time.

She explained, the stages of the development of the IKN were divided into five phases, namely the construction of the city ecosystem foundation in 2022-2024, the development of Nusantara as the central area of Indonesia in 2025-2029, the continuation of the development of Nusantara in the 2030-2034 period, the construction of three cities (Nusantara-Balikpapan-Samarinda) in 2035-2039, and strengthen its reputation as "a global city for all" in 2040-2045. A construction project for the IKN, with a total cost of IDR 23.72 trillion, is being worked on by the PUPR Ministry includes water sources, roads, urban planning, and housing.

Amalia Adininggar, Deputy for Economic Affairs of The Ministry of National Development Planning (Bappenas), who also participated in the forum online, said that IKN will develop into a new economy superhub, underpinned by four pillars: science and technology-focused human resource development, sustainable economic growth, inclusive and equitable development, and strengthening national resilience and governance."The new IKN has a tagline that is locally integrated, globally-connected, and universally inspired,”. Therefore, the relocation of IKN Jakarta to Nusantara effectively establishes a national identity and places the nation's capital in the country's geographic center, or Indonesiacentric,” Amalia explained.

The relocation of IKN, according to IKN Authority Secretary Achmad Jaka Santos Adiwijaya, is based on Law Number 3 of 2022 on the State Capital, which declared that Indonesia's IKN is named Nusantara and is a special capital area at the provincial level. The development of an urban area of 56,180 hectares and a development area of 199,962 hectares will take place on IKN, which has a total land area of 256,142 hectares. Also known as Sustainable Forest City, Nusantara will be created in accordance with five principles: green, smart, inclusive, resilient, and sustainable.


Agung Wicaksono, Deputy Chairman of the IKN Investment and Capital Authority, continued, in achieving the vision of Golden Indonesia 2045, the Government of Indonesia has concentrated on the first phase of IKN development, which consists of Top Priorities, namely energy, transportation, and communications, water treatment, telecommunications, housing, and waste treatment. In addition, High Priority encompasses urban planning, technology, medical facilities, commercial buildings, schools and universities, and industrial estates.

For investors, the development of the IKN Nusantara opens up investment opportunities in the Top Priority and High Priority sectors. The Government of Indonesia also provides incentives in the form of special tax incentives, including tax holidays, super deduction taxes for investments in research and development (R&D), super deduction donations, income tax (PPh), Value Added Tax (VAT), and excise, to encourage investors to invest in IKN Nusantara.

"IKN Nusantara's funding scheme consists of Public-Private Partnership, Company Participation, Use of Public Facilities and Government Assets with control from the IKN Authority, Foreign Direct Investment (FDI), creative funding sources, and many more. The Government of the Republic of Indonesia can take action to encourage investment in IKN by promoting it in international venues like the Hannover Messe and other forums,” according to Agung.


The President of The Republic of Indonesia and The Chancellor of Germany Asess The Concept of IKN In The Walkabout

Following the opening of the Indonesian Pavilion in Hall 2 of the Hannover Fairgrounds on Monday, April 17, Indonesian President Joko Widodo and German Chancellor Olaf Scholz previously visited the National Capital (IKN) booth during a walkabout. In that event, they also reviewed another co-exhibitor, namely Akebono Brake Astra Indonesia.

Development projects in IKN Nusantara are one of the investments for German investors that the President invited to make in Indonesia. The development, according to the head of state, is not the creation of a brand-new metropolis from scratch but rather a new hub that connects numerous already-existing facilities in neighboring cities. “Nusantara, a smart and sustainable forest city, with 65 percent of the area dedicated to tropical forests is built using green energy and green economic concepts," stated the President. 

At the same event, the Director General of Industrial Resilience, Regions and International Access (KPAII) of the Ministry of Industry, Eko S.A Cahyanto, said that industry players are expected to be able to contribute to the development of IKN by developing high-level technology to support the successful implementation of its development.

"Businesspeople and investors from around the world can seize this once-in-a-lifetime opportunity to participate in the history of the birth of a new civilization in the Capital of  Nusantara," Eko added.