Softbank’s exit from Indonesia’s new capital project sees it turn to Saudi Arabia, UAE and crowdfunding
- Indonesia needs investors for its Nusantara development in Borneo as state funds will only cover a fifth of US$34 billion project
- Failure to secure funding for the project will leave a stain on President Joko Widodo’s legacy, say analysts
Coordinating Minister of Maritime and Investment Affairs Luhut Pandjaitan, in revealing SoftBank’s exit, attributed it to “decline in their share price” and Saudi Arabia’s withdrawal of funds from the company’s venture capital arm Vision Fund 2.
SoftBank suggested otherwise. In a statement, its board director Ken Miyauchi said: “Return of investment, whether from timing or the amount of ROI itself, is the main reason why we were backing out from the project.”
Miyauchi was quick to add in his statement that SoftBank would continue investing in Southeast Asia’s largest economy, which is home to 270 million people.
Citing his boss Masayoshi Son, Miyauchi said SoftBank will shift money previously allocated for Nusantara to “provincial-level developments in Indonesia, for example to West Sumatra, whose potentials we are still exploring”.
