ANN/THE JAKARTA POST – Investors are demanding significant returns to participate in the development of the future capital city of Indonesia, Nusantara, despite the numerous incentives offered to attract them.
Public Works and Housing Minister Basuki Hadimuljono, who also serves as the acting head of the Nusantara Capital City (IKN) Authority, mentioned that based on his experience with construction projects under his ministry, potential investors generally seek a minimum internal rate of return (IRR) exceeding 12 per cent. In basic terms, the IRR signifies the annual profit a project generates for its investors.
“An IRR above 12 per cent will undoubtedly attract both foreign and domestic investors,” Basuki remarked on Friday, as quoted by Bisnis. He added that the government might need to provide further support to make construction projects more enticing if the return rate drops below 11 per cent. However, if the return rate is 12 per cent or higher, the project could attract purely foreign direct investment (FDI) without additional government assistance.
