Investment Target Rises to Rp2,320 Trillion, Yet BKPM Budget is Slashed by 30 Per Cent

The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) is facing a severe policy paradox in managing the national investment climate. Amidst a surge in investment realisation targets set at up to Rp2,320 trillion, the agency’s operational budget ceiling has been slashed by more than 30 per cent by the government.

This budgetary pressure risks disrupting the improvement of integrated licensing services and the reliability of the Online Single Submission (OSS) system, which is currently undergoing upgrades. The Deputy for Investment Planning at the Ministry of Investment and Downstreaming/BKPM, Ichsan Zulkarnaen, revealed intense debates with the House of Representatives (DPR RI) regarding the disparity between high investment targets and the reduction in BKPM’s operational support.

“Next year, we are targeted to achieve investments of Rp2,200 trillion to Rp2,320 trillion. This year, the target is Rp2,041 trillion, representing an increase of approximately 13.8 per cent. However, the BKPM budget has been cut by more much more than 30 per cent. Members of the DPR have voiced this as an anomaly,” Ichsan stated during the Indonesia EBTKE ConEx 2026 forum, as reported on Friday, 4 September 2026.

Based on these conditions, Ichsan noted that BKPM has proposed a special budget increase to perfect the technological infrastructure for licensing into OSS 2.0. This system overhaul refers to the implementation of Government Regulation (PP) Number 28 of 2025 regarding Risk-Based Business Licensing.

He emphasised that the request for additional funds is not for the agency’s internal interests, but to provide certainty and ease for business actors on the ground. “We realise that the OSS system is often perceived as a hurdle by business actors. Currently, OSS is being upgraded to OSS 2.0. This is not merely lip service; we are actively implementing it,” he asserted.

Ichsan explained that the drafting of PP 28/2025—involving the Ministry of Energy and Mineral Resources (ESDM), the Ministry of Public Works (PU), and the Ministry of Higher Education, Science, and Technology—requires a robust digital system foundation to permanently resolve slow bureaucratic processes. “We are proposing a budget increase not for BKPM’s internal use, but to improve the OSS system so that business actors are the beneficiaries. We request support so that this budget can be adjusted to resolve licensing obstacles,” he said.

In addition to licensing system hurdles, Ichsan disclosed another classic issue hindering the execution of investment projects in the regions: the prevalence of overlapping land and territory claims. The government is urging all regional governments (Pemda) to accelerate the preparation and integration of Detailed Spatial Plans (RDTR) into the OSS system to ensure legal certainty for investment locations from the outset.

“Out of the 2,000 RDTRs that must be integrated with OSS, only about 25 per cent of regions currently possess them. It is no wonder that land and territory overlap issues continue to occur,” Ichsan explained.

He remains optimistic that if regional RDTR integration is completed and the development of OSS 2.0 proceeds without budget constraints, the uncertainties regarding land and licensing that have long hindered investors will be eliminated. “If RDTR is fully integrated and licensing is transparent, we can eliminate overlap issues. We are also encouraging more transparent sale and purchase agreements to achieve investment certainty,” he concluded.

Previously, it was reported that the Ministry of Investment and Downstreaming/BKPM noted that global clean energy investment flows reached a staggering USD2.2 trillion this year. This presents an opportunity for Indonesia to absorb this potential, given its renewable energy (EBT) resource potential of 3,700 Gigawatts (GW).

Ichsan emphasised that the current global investment competition is dominated by the pursuit of environmentally friendly projects. “The world is currently in a sprint towards clean energy. It is estimated that total global investment in 2026 alone could reach approximately USD3.4 trillion, with more than 50 per cent, or about USD2.2 trillion (65 per cent), flowing into clean energy,” Ichsan stated.

He noted that this 65 per cent share of global fund flows represents a golden momentum for Indonesia to attract large-scale foreign capital. Indonesia is considered to possess a rare global comparative advantage in its abundant renewable energy potential.

“Indonesia has renewable energy potential of more than 3,700 GW. We have massive potential in hydro, wind, geothermal, and others. This is a huge opportunity for us,” he explained.

Despite the abundance of clean energy resources, the government’s greatest challenge is converting this potential from paper into actual project execution on the ground. BKPM is focusing its national strategy on three main pillars: unblocking investment, executing strategic projects, and building energy resilience.

“The key is how we can unlock investment and resolve the bottlenecks on the ground,” Ichsen asserted.

To capture the opportunity of the USD2.2 trillion capital flow, the government is working to tidy up the business climate through improved licensing systems and spatial certainty. This step is taken to address the doubts of global investors often held back by lengthy licensing processes at the regional level.

“The main challenges to be resolved are licensing certainty, transparency in sale and purchase contracts, and the resolution of land overlaps through the strengthening of RDTR integrated with OSS,” he added.