Bali Governor, Badung Regent Learn From Jakarta's Creative Financing

Jakarta Governor Pramono Anung welcomed Bali Governor I Wayan Koster and Badung Regent I Wayan Adi Arnawa at Jakarta City Hall on Tuesday (8/4).

Amid current economic challenges, local governments can no longer rely solely on regional budgets

The meeting focused on the use of alternative financing schemes to support regional development without placing additional pressure on regional budget (APBD).

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"During the meeting, we discussed a range of topics, including creative financing, municipal bonds, the Floor Area Ratio (KLB), SP3L, and other financing instruments," Pramono said.

He explained that amid current economic challenges, local governments can no longer rely solely on regional budgets to finance development. Instead, creative and innovative financing approaches are needed to support regional growth.

Regarding his discussion with the Badung Regent, Pramono said they explored the use of municipal bonds to address one of the regency's biggest challenges: traffic congestion. Badung has one of the largest regional budgets in Indonesia, totaling around Rp13 trillion.

"We discussed this because Badung has the potential to issue municipal bonds, just as Jakarta has done," he added.

Meanwhile, Pramono discussed optimizing the use of the Floor Area Ratio (KLB) with the Bali Governor as an alternative source of non-budget financing. Bali currently limits building heights to 15 meters, or no taller than a coconut tree.

"I suggested that if Bali wants to pursue further development while maintaining the support of its traditional communities, then appropriate regulations would be necessary," Pramono noted.

He also cited Jakarta's implementation of the KLB scheme, under which proceeds are used to help finance infrastructure development.

Responding to the discussion, Bali Governor I Wayan Koster welcomed Jakarta's creative financing approach. He said several of the financing schemes could also be applied to accelerate infrastructure development in Bali.

"There are several approaches that could be implemented in Bali, particularly those related to airspace utilization, building height regulations, and partnerships with the private sector to support infrastructure development," Koster said.

He added that Bali would further study the financing schemes and adapt them to local regulations.

Badung Regent I Wayan Adi Arnawa also welcomed the discussion on using creative financing to support Bali's tourism sector.

As a tourism destination, Bali faces several challenges, including traffic congestion caused by road bottlenecks. To address the issue, the Badung administration is accelerating the construction of several strategic roads using loan financing.

"The funding comes from loan schemes as well as locally generated revenue (PAD). In total, it amounts to around Rp2.9 trillion, with Rp2.4 trillion financed through loans and more than Rp511 billion from PAD," he said.

I Wayan Adi Arnawa said the regency is also seeking sustainable financing to improve the quality of Bali's tourism sector. To support that goal, the regency is also exploring the use of municipal bonds as a creative financing option.

"That is why today we accompanied the Bali Governor to learn more about the administrative process involved in issuing municipal bonds," he added.

He expressed confidence that creative financing would accelerate infrastructure development in Bali while boosting the country's foreign exchange earnings.