Building a Brand New Capital City Costs More Than Indonesia's State Budget Alone Can Cover. Here's Who's Actually Paying for IKN
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4 min read
Rp48,8 trillion. That is the part of IKN Nusantara's funding that comes straight from the state budget (APBN), according to figures from the capital's authority reported in August 2026. The total reported funding is Rp257,56 trillion.
So who pays for the rest? This post breaks down who is paying for IKN: the state, private investors, or partnership deals. It also shows how far the money has fallen short of the original plan. It is about public finance, not a tip on any stock.
When the project was designed, the cost was put at about Rp466 trillion. The plan was that the state would not carry most of it.
The reported split, as Investortrust summarised it:
| Source | Share | Amount |
|---|---|---|
| State budget (APBN) | 19,18% | Rp89,4 trillion |
| State and regional companies (BUMN, BUMD) | 26,48% | Rp123,2 trillion |
| Partnership with private firms (KPBU) | 54,38% | Rp253,4 trillion |
Add the three amounts and you get about Rp466 trillion. The big bet was on the last row.
KPBU stands for Kerja Sama Pemerintah dengan Badan Usaha. In English, a public-private partnership.
The idea is simple. A private company builds something, like housing or an office tower. The government agrees to a deal for how that company earns its money back over many years. The company puts up the cash first.
That is why a KPBU number is a project value, not cash the state has spent.
Here is what the Nusantara Capital Authority (OIKN) reported. Its head, Basuki Hadimuljono, gave the total as Rp257,56 trillion through August 2026, per Investortrust and Katadata.
| Source | Amount | Share of total |
|---|---|---|
| State budget (APBN) | Rp48,8 trillion | about 19% |
| KPBU partnership projects | Rp134,22 trillion | about 52% |
| Private investment | Rp74,54 trillion | about 29% |
The shares are our own division of the reported amounts. Grants also exist, but their value was not given in the data we found.
The private figure of Rp74,54 trillion comes from 67 investors, per OIKN's statement as reported by RCTI+. Together, KPBU and private investment come to Rp208,7 trillion.
Not quite, at least on paper.
The original plan counted on Rp253,4 trillion from KPBU. Reported KPBU plus private investment is now Rp208,7 trillion. That is about 82% of the old KPBU line. It is a rough comparison, because the old plan listed state companies separately and the new report does not.
The path was slower than that number suggests. Reports from 2024 said only Rp35,5 trillion of the KPBU and private target had been collected by mid-2024, as CNBC Indonesia reported. The jump since then is large.
One caution. "Investment entered" is the authority's own count. Some of it may be commitments for projects not yet finished. The Merah Putih headline on the same question said private money was still mostly at the commitment stage. We could not verify how much has been paid in cash.
The target is to make Nusantara a political centre by 2028, per the Katadata report above.
The state-budget share is small by design. That means the timeline leans on private builders showing up and finishing their work. OIKN reported the second batch of construction (2025 to 2027) was at an average of 13,6% progress by August 2026. The third batch was still in tender preparation.
If private money slows, the state is left with a choice: pay more, or accept a slower move. That choice is one reason the budget matters to everyone, not just people in Kalimantan.
Every rupiah the APBN puts into IKN is a rupiah not spent elsewhere. The deficit has to be funded by selling government bonds. For how that works, read how government bond issuance affects yields. For the wider picture, see how the budget deficit moves bond yields.
IKN is a small share of the whole budget. But it shows how the state tries to build big things without borrowing everything itself.
Open the NetWort macro page. Look at the government bond yields and the BI rate. When the state needs more funding, those are the numbers that tend to feel it first. Check them against the headlines on IKN spending.