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

Jakarta (ANTARA) — Basri Baco, Deputy Chair of the Budget Committee (Banggar) of the Jakarta DPRD, has affirmed that the legislature is prioritising the principle of prudence in responding to the plan to issue regional bonds worth Rp3.5 trillion as an innovative financing instrument by the Jakarta Provincial Government.

Moreover, this regional bond issuance is said to be the first of its kind for all regional governments in Indonesia.

“The Jakarta DPRD is taking a more cautious stance, because this form of regional borrowing through bonds has never been implemented before,” he said in a statement in Jakarta on Thursday.

Baco therefore said an in-depth study is needed into the urgency of choosing the bond scheme over other financing instruments, including the benefits the bond proceeds would bring to the public.

“The debt or bond funds must genuinely benefit the public and, above all, generate returns in order to repay the principal and interest on the loan,” he said.

Baco confirmed that the Rp3.5 trillion bond remains an executive-level plan. The technical details of the regional bond issuance need to be examined further in Banggar meetings with the Regional Government Budget Team (TAPD).

Previously, the Jakarta Provincial Government targeted issuing regional bonds worth Rp3.5 trillion in June 2027, coinciding with the quincentennial of the city of Jakarta.

The financing instrument is projected to serve as one of the alternative funding sources to accelerate infrastructure development and improve the quality of public services.

The regional bonds are planned to have a maximum tenor of seven years. The coupon rate will be determined by taking into account conditions and dynamics of the financial market at the time of issuance, so that the financing remains efficient and competitive.

Proceeds from the regional bond issuance will be focused on the construction of the Manggarai–Dukuh Atas LRT Phase 1C, regional general hospitals (RSUD), new school units, retention basins and polders for flood control, as well as low-cost flats.

Preparations for the regional bond issuance continue to be refined through coordination with the central government.