JAKARTA – The Jakarta provincial government has increased the planned size of its municipal bond issuance to around IDR 5.2 trillion from the previously proposed IDR 3.5 trillion.
The additional funding will be used to accelerate the development of the Jakarta LRT and the construction of an international-standard hospital.
Hardiyanto Kenneth, a Member of Commission C of the Jakarta Regional House of Representatives (DPRD), expressed support for the plan. He said a municipal bond issuance was an appropriate financing alternative amid rising development needs and the fiscal challenges facing the regional government.
“The move represents a financing innovation that deserves support, provided it is implemented transparently, accountably and in the public interest,” Kenneth said in Jakarta, as quoted by Antara on Thursday (6/8).
Kenneth said the regional government needed to diversify its funding sources so that development would not rely entirely on the Regional Budget (APBD).
“In principle, I fully appreciate Jakarta Governor Pramono Anung’s efforts to introduce a range of innovative financing schemes, including the planned IDR 5.2 trillion municipal bond issuance,” he said.
He added that the municipal bond should not merely serve as a new source of financing but should also deliver long-term benefits to the public. Funds raised should therefore be directed towards productive projects with economic and social impacts, particularly in the transport, healthcare and public infrastructure sectors.
“The bond must not be used to finance routine or consumptive expenditure,” Kenneth said.
As a member of Commission C, which oversees regional finances, Kenneth said the DPRD would closely monitor the entire bond issuance process, from planning and project selection to the use of the proceeds.
“As part of the DPRD’s oversight function, I will ensure that every stage of this policy is implemented in accordance with the principles of good governance,” he said.
He added that transparency, accountability and fiscal discipline would be crucial to maintaining investor confidence in the municipal bonds to be issued by the Jakarta provincial government.
According to Kenneth, investors will assess the government’s credibility based on its financial management and the public benefits generated by the projects financed through the bond issuance. (DH/ZH)