Jakarta Has Capacity to Issue Bonds up to Rp20 Trillion

The provincial government of DKI Jakarta is confident it can obtain approval from the central government to issue municipal bonds. It is also claimed that these bonds will not become a burden for subsequent administrations to repay.

Governor of DKI Jakarta, Pramono Anung, claimed that his side has already received approval from the Coordinating Ministry for Economic Affairs to issue the municipal bonds.

“In principle, the DKI Jakarta government could not take a step like this without the approval of the central government. One of the approvals in principle that we have received is from the Coordinating Minister for Economic Affairs,” he said at Jakarta City Hall on Tuesday (4/8).

Pramono said he would coordinate with the Ministry of Home Affairs (Kemendagri) and the Ministry of Finance (Kemenkeu) regarding the issuance of the municipal bonds.

This is because the bond issuance must also obtain approval from those two ministries.

“Therefore, it is indeed a requirement that we also obtain approval from the Ministry of Home Affairs, the Ministry of Finance and Bappenas, and we will do that. That is why I am confident that what we are doing is a good step,” he said.

Pramono added that his side has also coordinated with the International Finance Corporation of the World Bank regarding the planned municipal bond issuance. At present, Jakarta has the capacity to issue municipal bonds of up to Rp20 trillion.

“So Jakarta has the capacity for bonds of up to Rp20 trillion, but we are only using Rp3.5 trillion. So it remains very safe for Jakarta, and the concern that it will become a burden for the next government will certainly not materialise,” said Pramono.

It is understood that the DKI Jakarta provincial government plans to issue municipal bonds worth Rp3.5 trillion in June 2027. The bonds, which will be used to fund basic infrastructure development in Jakarta, are planned to have a tenor of seven years.