IKN Secures Rp 48.8 Trillion for Second Phase Construction, Targets Political Capital Status by 2028
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PENAJAM PASER UTARA, Investortrust.id — Indonesia has approved a Rp 48.8 trillion ($2.99 billion) budget to fund the second phase of construction for Ibu Kota Nusantara (IKN), aiming to establish the new capital as the country’s political center by 2028, the capital's top official said on Monday, July 14, 2025.
Head of the IKN Authority Basuki Hadimuljono confirmed the funding during a site visit in Sepaku, Penajam Paser Utara, East Kalimantan, on Monday.
The budget will support the development of critical government infrastructure, particularly the offices and housing complexes for Indonesia’s legislative and judicial institutions.
Basuki, who also serves as Minister of Public Works and Housing, said the budget would be disbursed gradually until 2028. For the 2026 fiscal year, Rp 5.05 trillion ($309 million) has been earmarked. However, the IKN Authority has proposed an additional Rp 16.13 trillion ($987 million) to keep the construction timeline on track.
“We’ve submitted a request to increase the 2026 budget to Rp 21.18 trillion, to ensure we meet the construction milestones set for 2025–2026,” Basuki said, as quoted by Antara.
The proposal was formally sent to the Ministry of Finance through Letter No. B.132/Kepala/Otorita IKN/VII/2025, dated July 4, 2025.
The second phase of IKN construction will focus on building the physical infrastructure for Indonesia’s legislative and judicial branches, including office buildings and residential facilities. These are intended to become fully operational by 2028, establishing IKN’s role as the new seat of political power.
In parallel, the Ministry of Public Works is working closely with the IKN Authority to complete the supporting ecosystem necessary for the capital’s long-term governance function, such as roads, utilities, and public service facilities.
Vice President Gibran Rakabuming Raka visited the construction site recently alongside Basuki and Waskita Karya's Operations Director Ari Asmoko, underscoring the government’s commitment to accelerating the IKN agenda.
The development of IKN, located in East Kalimantan’s Penajam Paser Utara and Kutai Kartanegara regencies, is a cornerstone of President Prabowo Subianto’s vision to decentralize national administration, reduce Jakarta’s urban burden, and promote inclusive growth across Indonesia.