JAKARTA: New York City has offered to send financial experts to Jakarta to help the capital prepare for its planned municipal bond issuance, as Governor Pramono Anung seeks new ways to finance infrastructure projects amid tighter fiscal space.
Pramono discussed Jakarta’s bond plan with New York Mayor Zohran Mamdani during a bilateral meeting in the United States at Civic Hall in New York on Sunday (Sept 20), on the sidelines of the Urban 20 Mayors Summit, which brought together leaders from 34 major cities across Group of 20 countries to tackle common urban challenges.
The two mayors exchanged experiences on public transportation, flooding and air pollution, before discussing Jakarta’s plan to issue municipal bonds.
Mamdani expressed his support for the plan and offered to have New York financial experts share their experience with Jakarta officials.
“I fully support Jakarta’s plan for municipal bonds. We are eager to dispatch our financial experts to share insights on the issuance process with the Jakarta government,” Mamdani said in a statement released by the Jakarta administration on Monday.
New York has used municipal bonds to finance public infrastructure and utilities, offering Jakarta an opportunity to learn from the city’s experience as it prepares for what Pramono has described as Indonesia’s first municipal bond issuance.
Jakarta plans to issue the bonds in stages, with the latest proposal putting the total at up to Rp 5.6 trillion (US$340 million) through 2027 and 2028.
The proceeds are expected to help finance major infrastructure projects, including an extension of the city’s light rail transit (LRT) network and the construction of a new hospital. Under a 2024 Finance Ministry regulation, regional administrations may issue bonds to finance infrastructure development, provided they meet financial and administrative requirements.
The issuance requires approval from the finance minister and consideration from the home minister, among other requirements. The proposal is currently being deliberated by the Jakarta City Council, Pramono’s special staffer for communications Cyril “Chico” Hakim previously told The Jakarta Post.
The Home Ministry has also reviewed it but has yet to issue a formal recommendation.
Pramono first pushed the plan as Jakarta faced a sharp reduction in fiscal transfers from the central government amid its sweeping austerity measures to finance President Prabowo Subianto’s costly initiatives, including the free nutritious meal programme.
Jakarta’s regional budget stood at Rp 79 trillion for the 2026 fiscal year, down from the previously agreed Rp 95 trillion, as the central government slashed the revenue-sharing funds allocated to the capital by Rp 15 trillion.
However, the plan to issue bonds has met pushback from former finance minister Purbaya Yudhi Sadewa, pointing to the capital’s large fiscal capacity. Experts have largely defended the proposal as a means to help Jakarta finance costly public infrastructure and test its fiscal autonomy.
Sunday’s sideline discussions also reflected the cities’ shared exposure to flooding, as Pramono outlined Jakarta’s efforts to strengthen its flood-control infrastructure.
“Much like New York, flooding is one of Jakarta’s most critical challenges,” Pramono said. “That’s why we continue to strengthen our flood defenses, limit groundwater extraction to slow land subsidence and advance the Giant Sea Wall project.”
The meeting also touched on Jakarta’s public transportation system, including Transjabodetabek, which Pramono described as key to connecting the capital with its surrounding cities and managing the millions of daily commuters travelling into Jakarta. - The Jakarta Post/ANN
