Indonesia's new capital attracts water businesses from Japan, Korea, and China


Indonesia plans to build its new capital, Nusantara (IKN), in Borneo. (Image:

Water infrastructure companies from Japan, South Korea, and China are eager to participate in Indonesia's multibillion-dollar project to build a new capital, with the first phase of the relocation set to begin in August.

The Indonesian government plans to move the capital from Jakarta to Nusantara, a new city on the island of Borneo. As the country develops the city's basic infrastructure, it aims to house a population of 2 million by 2040 and host various industries, generating significant demand for clean water and water management systems.

"There will be business opportunities in Indonesia's new capital," said Hiroshi Shimizu, a senior civil engineer at Japan's CTI Engineering International, in an interview with Nikkei Asia during the World Water Forum in Bali. Over 250 booths were set up at the event by governments and companies from around the globe.

Tokyo-based CTI, which provides consulting services for engineering and infrastructure project management, hopes to offer services such as inundation and flood risk assessments, and flood countermeasure consulting for the new capital, citing geographical similarities between Indonesia and Japan.

In recent years, Tokyo has struggled to offer infrastructure projects in developing nations on the same scale as China. However, Shimizu believes Japan still has valuable contributions to make in Southeast Asia.

"I think we should focus on the soft infrastructure aspects," he said, referring to knowledge and systems, as opposed to "hard infrastructure," like railways and ports. The Japanese company has assisted in developing water infrastructure, including bridges and water supply systems, in emerging economies. It also aims to expand disaster prevention efforts using the Internet of Things and artificial intelligence.

Big opportunities in “smart city”

Indonesian President Joko Widodo, set to leave office in October at the end of his second term, views the capital relocation project as his legacy. The government plans to provide 20% of the funding from the state budget, with the remainder expected to come from Indonesia's private sector and foreign investment.

At another side event during the World Water Forum, Bambang Susantono, chairman of the Nusantara Capital Authority, delivered a speech seeking international cooperation to ensure access to clean, safe water. He described the new capital as a "smart city" and highlighted efforts to implement technologies like a flood early-warning system to reduce casualties and increase resilience to floods.

"The capital relocation offers tremendous opportunities. We want to be proactive in supporting the development of Indonesia," said Wang Song, vice president of CITIC Environment Investment Group, a unit of the Chinese state-owned conglomerate CITIC, at the Bali expo.

CITIC Environment Investment focuses on projects such as water treatment and solid waste processing. While CITIC is exploring opportunities in Indonesia, including the capital project, it has not yet committed to investing in the new capital.

In contrast, South Korea's Korea Water Resources Corp. is already progressing in Nusantara. The South Korean government-owned utility is constructing the Sepaku Semoi water treatment plant to provide clean water for Nusantara and nearby areas, making it the first to offer drinkable tap water in the new capital.

When asked about additional investments in Nusantara, a company representative said, "We see rising demand for infrastructure," and added, "We want to expand our business there," utilizing cutting-edge technologies such as AI for water resource management.

Indonesian President Joko Widodo attended World Water Forum in Bali. (Photo: World Water Forum)

A catalyst for hydrogen strategy

According to ANTARA, the Indonesian government has issued the National Hydrogen Strategy to promote the use of hydrogen as a renewable energy source. The strategy aims to reduce Indonesia's reliance on fossil fuels, pursue decarbonization targets by developing the domestic hydrogen market, and export hydrogen and its derivatives to global markets.

A catalyst is deemed necessary for the national strategy's success, and the new capital Nusantara, being built in East Kalimantan, is regarded as this catalyst.

The first step toward achieving the target involves developing a 50 MW solar power plant capable of conducting electrolysis, a method that decomposes water (H₂O) into oxygen (O₂) using electric current to produce green hydrogen. This process will enable Nusantara City to generate an adequate hydrogen supply to meet the domestic needs of its residents. According to the plan, hydrogen gas will be distributed through a multi-utility tunnel (MUT).

Source: Nikkei AsiaANTARA

Related Topics
Abundant solar energy in Indonesia remains unexploited, venture firms say
Indonesia to launch 2025 hydrogen plan for industry, energy sectors

More from Renewable Energy Certificate

Download request

Please fill out the form to download samples.

Job title
Company email
By using this site, you agree with our use of cookies.