Jakarta DPRD Urges Caution Over Rp3.5 Trillion Regional Bond Plan

Jakarta (ANTARA) - The Deputy Chair of the Jakarta DPRD Budget Agency (Banggar), Basri Baco, has stressed that the legislature is prioritising the principle of prudence in responding to the planned issuance of regional bonds worth Rp3.5 trillion as an innovative financing scheme by the Jakarta Provincial Government. This caution is heightened by the fact that this regional bond issuance is said to be the first pilot project for all regional governments in Indonesia. “The Jakarta DPRD is taking a more cautious stance, because this type of regional loan in the form of bonds has never been implemented before,” he said in a statement in Jakarta on Thursday. Baco added that an in-depth study is therefore needed on the urgency of choosing the bond scheme over other financing instruments, including the benefits of the bond proceeds for the public. “This debt or bond fund must be truly beneficial for the community and, moreover, can also generate returns in order to pay the principal and interest of the loan,” he said. Baco confirmed that the Rp3.5 trillion bond is still limited to an executive plan. Detailed technical aspects of the regional bond arrangement need to be explored in a Banggar meeting with the Regional Government Budget Team (TAPD). Previously, the Jakarta Provincial Government targeted the issuance of the Rp3.5 trillion regional bond in June 2027, coinciding with the commemoration of Jakarta’s five-hundredth anniversary. The financing instrument is projected to be an alternative funding source to accelerate infrastructure development and improve the quality of public services. The regional bond is planned to have a maximum tenor of seven years. The coupon rate will be set by considering financial market conditions and dynamics at the time of issuance to ensure financing remains efficient and competitive. Proceeds from the Regional Bond issuance will be focused on the construction of the LRT Phase 1C Manggarai–Dukuh Atas line, regional public hospitals (RSUD), new school units, reservoirs and polders for flood control, and public housing flats. Preparations for the Regional Bond issuance continue to be finalised through coordination with the Central Government.