Jakarta. Presidential envoy Hashim Djojohadikusumo said Wednesday that Indonesia didn’t want to heavily rely on foreign investment for the country’s housing program. To this end, the government is planning to fund the ambitious project, among others, through an SDG bond.

President Prabowo Subianto wants to build 3 million affordable homes each year. In other words, approximately 15 million families will gain access to decent housing during his term. Prabowo has also appointed his younger brother, Hashim, to chair the housing task force. Speaking at the DBS Asian Insights Conference, Hashim talked of the project’s financing plans.

“We welcome foreign investments, but we don’t want to be totally dependent on them [international investors] for the housing program. … We have made some calculations over the past seven or eight months. We believe we have the liquidity to be able to finance, if not all, most of this program from internal resources,” Hashim said in Jakarta.

The businessman revealed that he had just met with Finance Minister Sri Mulyani earlier that day, even unveiling the ministry’s plans to issue SDG bonds. SDGs stand for the Sustainable Development Goals, which list the global targets that aim to create a better future for the people and planet. 

“These bonds will be issued to, perhaps, ESG funds and other funds. The Finance Ministry is very keen to do this. There are quite a lot of potential borrowers willing to do this as part of its [efforts to comply with the] ESG [environmental, social, governance] principles,” Hashim told the forum.

Hashim did not provide further details about the SDG bond plans. 

Parts of the program will also be renovation works rather than building housing units from scratch. The government will incentivize the state-run banks to provide renovation loans and mortgages, according to Hashim. 

Hashim remains confident that the 3 million housing program can be a major booster to Indonesia’s economy, even saying that it could lead to an increase of one or two percentage points to the annual growth. His brother Prabowo aspires to unlock an 8 percent growth during his term, a very ambitious dream, as many have said since what the resource-rich country usually falls within the 5 percent range. In his calculations, the housing sector has 185 linkages to the economy through the purchases of cement, lamps, electricity, and even televisions.

Despite Hashim’s statement on foreign investments, the housing program has gained the backing of a Qatari investor. Earlier this year, Sheikh Abdulaziz Al Thani of Qatar’s Qilaa International Group inked a memorandum of understanding to invest in the construction of 1 million homes in Indonesia. The Qatari investor intends to allocate between $16,000 and $20,000 for each residential unit. This brings the total investment to up to $20 billion.