Golkar Faction in MPR Pushes to Accelerate Academic Draft of Regional Bonds Bill

The Golkar Party Faction (FPG) of the MPR RI continues to push for the acceleration of the academic draft of the Regional Bonds Bill (RUU tentang Obligasi Daerah). The regulation is expected to provide a legal foundation for regional governments to use regional bonds as an alternative source of development financing.

Melchias Markus Mekeng, Chair of the Golkar Party Faction at the MPR RI, said the drafting of the academic paper for the Regional Bonds Bill is being refined with strategic input from resource persons and regional governments.

“The drafting of this academic paper is already 90 per cent complete, awaiting only corrections from experts in the DPR. After that, we will submit it to the DPR to be processed into law. We hope the process of enacting the law on regional bonds will not take long, so that regions can soon issue regional bonds,” he said on Wednesday (22/7/2026).

He explained that the drafting of the academic paper involves various stakeholders as a form of public participation in the legislative process.

According to him, input from various parties is needed so that the resulting regulation can address the needs of regional governments whilst providing legal certainty for prospective investors.

In the drafting process, FPG MPR RI has brought together stakeholders related to the issuance of regional bonds, ranging from regional governments, academics and business players to banks and related institutions.

“At every national seminar on regional bonds, we invite the stakeholders involved in the issuance process, such as governors, regents, mayors, DPRD members, academics, businesspeople from HIPMI and KADIN, Himbara and private banks, as well as other elements,” he said.

To date, FPG MPR RI has held national seminars on regional bonds in seven regions: North Sulawesi, the Special Region of Yogyakarta, West Java, East Java, Bali, East Nusa Tenggara and South Sumatra. Riau Province is the eighth region to host the event.

He said the national seminar in Riau is an important part of enriching information and input for the drafting of the academic paper for the Regional Bonds Bill.

“This is a form of public participation in the law-making process. We often hear questions on social media about public participation in legislation. And this is what we are doing,” he explained.

According to him, regional bonds can become an alternative source of development financing whilst broadening public participation in regional development.

However, the issuance of regional bonds still requires a strong and comprehensive legal umbrella in order to provide legal certainty, ensure good governance and boost investor confidence.

“Regional governments must also have fiscal independence. This fiscal independence of regional governments is stipulated in the 1945 Constitution of the Republic of Indonesia, particularly Articles 18, 18A and 18B. This is what drives us, the Golkar Party Faction, to draft the Regional Bonds Bill,” he said.

Following the national seminars, FPG MPR RI will also organise workshops in each region. These will address the technical aspects of issuing regional bonds, including the steps regional governments need to take.

“The workshops will be more technical. The OJK will explain the steps for issuing regional bonds, including explanations from other financial institutions. So when the Regional Bonds Law is enacted, regional governments will already know what they need to do,” he said.

Meanwhile, Hasan Fawzi, Chief Executive of Capital Market, Derivative Finance and Carbon Exchange Supervision and Member of the Board of Commissioners of the Financial Services Authority (OJK), said regional bonds are one instrument that can be used to support regional development financing.

According to him, the issuance of regional bonds requires understanding and support from all elements, especially regional leaders.

“The issuance of regional bonds requires understanding and support from all elements, particularly regional leaders,” he said.

He explained that the fiscal space of both central and regional governments has limits. Therefore, regional bonds or sukuk, as capital market instruments, have the potential to be used as alternative financing.

“Regional bonds or sukuk are capital market instruments with great potential for utilisation. Therefore, there needs to be a regulatory breakthrough on the issuance of regional bonds or sukuk to provide legal certainty and boost investor confidence,” he added.

Agus Fatoni, Director-General of Regional Financial Development at the Ministry of Home Affairs, said regional governments need to seek innovations and breakthroughs to obtain alternative financing sources.

“Of the 546 regions, only 44 have strong fiscal capacity, 35 have moderate fiscal capacity, whilst the majority, 467 regions, have weak fiscal capacity. Given these conditions, regional governments are required to be creative and innovative in seeking financing sources,” he said.

According to him, regional bonds are one financing option because they can support infrastructure development whilst involving public participation.

“Regional bonds are one option because they are an infrastructure financing instrument that can involve public participation,” he explained.

Meanwhile, Arman Syifa, Director of Audit V.B at the Audit Board of the Republic of Indonesia (BPK), said the issuance of regional bonds must take into account feasibility, fiscal capacity, governance and the principle of prudence.

“The issuance of regional bonds must be carried out with an approach based on feasibility, fiscal capacity, governance and prudence,” he said.

From the infrastructure financing perspective, Reynaldi Hermansjah, President Director of PT Sarana Multi Infrastruktur (Persero), expressed support for the issuance of regional bonds or sukuk.

“We support the issuance of regional bonds or sukuk. We can act as a catalyst and strategic partner for regional governments through assistance in preparing bond issuances, capacity building, and helping connect them with strategic investors,” he added.

Meanwhile, Edyanus Herman Halim, an academic at the Faculty of Economics and Business of the University of Riau, said the drafting of the Regional Bonds Law needs to consider potential risks, including the possibility of hidden debt burdens.

“Therefore, the drafting of the Regional Bonds Law must be able to avoid this risk of hidden debt,” he stressed.

According to him, several aspects need attention in the issuance of regional bonds, including the potential decline in regional government revenue, regional fiscal fundamentals, market limitations, regional governance, improved accountability, political dynamics among regional elites, and attractiveness to investors.

The national seminar was attended by the Acting Governor of Riau S.F. Hariyanto; Secretary of the Golkar Party Faction at the MPR RI Ferdiansyah; Treasurer of the Golkar Party Faction Adde Rosi Khairunnisa; Deputy Chair of the Golkar Party Faction Firman Soebagyo; member of the Golkar Party Faction from the Riau electoral district Karmila Sari; former governors of Riau Syamsuar, Saleh Djasit and Arsyadjuliandi Rachman; and Head of the Public Relations and Information Systems Bureau of the MPR RI Secretariat General, Budi Muliawan.