By Bernadette Christina
JAKARTA (Reuters) - SoftBank has offered to invest up to $40 billion in the new capital city Indonesia plans to build on Borneo island, a minister said on Friday, though the Japanese tech conglomerate said no figure had been suggested yet.
Indonesian President Joko Widodo announced in August plans to move the administrative capital to East Kalimantan province, on Borneo, to relieve Jakarta from "a heavy burden" due to overcrowding and pollution.
Indonesia has previously put the cost of moving the capital at $33 billion, but Luhut Pandjaitan, Indonesia's coordinating minister for maritime affairs and investment, said Softbank Group Corp had offered up to $40 billion.
"So we'll negotiate over the structure (of the investment). It could amount to $30-40 billion," he told reporters.
A spokeswoman for SoftBank said the group had not suggested specific numbers, echoing comments by CEO and founder Masayoshi Son last week.
"We're not dicussing the specific numbers yet, but a new smart city, newest technology, clean city, with a lot of AI (artifical intelligence), that's what I'm interested in supporting,” Son said during a visit to Jakarta last week.
Pandjaitan said he would discuss the potential investment further with Son further on Monday at the World Economic Forum gathering in the Swiss resort of Davos and that President Joko Widodo will likely decide on the agreement in February.
Widodo said on Thursday that a planned sovereign wealth fund to finance infrastructure projects in Southeast Asia’s biggest economy will raise at least $20 billion once established, though Pandjaitan said it was still under discussion whether investment would be channeled through the sovereign wealth fund.
Widodo discussed plans to establish the fund with Abu Dhabi’s Crown Prince Sheikh Mohammed Bin Zayed al-Nahyan last weekend during an official visit to the United Arab Emirates.
Sovereign wealth funds are typically used by countries to direct funds from resource wealth such as oil, though Indonesia also plans to invite foreign investment into its fund.
To help attract investment, Indonesia has asked Abu Dhabi’s crown prince, former British Prime Minister Tony Blair and Softbank's Son to advise on plans to move the capital, ministers have said.
Planning minister Suharso Monoarfa said this week that Softbank was interested in providing self-driving vehicles for the capital.
In June, the self-driving car joint venture of SoftBank and Toyota Motor said it plans to begin operating in Southeast Asia this year.
(Additional reporting by Fransiska Nangoy and Sam Nussey in Tokyo; Writing by Stanley Widianto; Editing by Ed Davies and Simon Cameron-Moore)