• SoftBank offered $30 billion to $40 billion to help develop a new capital on Borneo island
  • Jakarta is overcrowded, polluted and sinking
  • The new city is slated to be completed by 2024

SoftBank Group, the Japanese tech conglomerate already reeling from questionable loans made to unprofitable startups around the world, has reportedly offered to invest $30 billion to $40 billion to help Indonesia build a new capital city.

Indonesia wants to construct a new capital in East Kalimantan province on the island of Borneo since Jakarta has become too polluted, congested and overcrowded. Jakarta is also subject to earthquakes, flooding and is sinking due to the uncontrolled extraction of ground water.

SoftBank CEO and founder Masayoshi Son met with Indonesia’s President Joko Widodo last week to express his interest in the project. Son has also been named to the steering committee that is overseeing the planned city’s construction.

That steering committee also includes former British Prime Minister Tony Blair and Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed Al Nahyan.

Indonesian officials have estimated that the total cost of building the new capital would be about $34 billion – less than the maximum total outlay proposed by SoftBank.

Construction is set to commence later this year and finish in 2024. The new city is expected to feature world-class educational institutions, modern hospitals, botanical gardens and an environmentally viable transportation system comprising electric vehicles.

“I will meet Masayoshi in Davos and then Tokyo,” Coordinating Minister for Maritime Affairs and Investments Luhut Pandjaitan said. “[The] president will decide on the matter in February.”

Pandjaitan added: “We have not yet decided how [SoftBank] would invest [in the new city], it could be for education, a research center or hospital development.”

Investors from the Middle East, China the U.S., Germany, and the U.K. have also expressed interest in investing in developing the city.

However, a SoftBank representative said it did not specify a specific figure for the investment.

Son reportedly said during his recent visit to Jakarta: “We’re not discussing the specific numbers yet, but a new smart city, newest technology, clean city, with a lot of [artificial intelligence], that’s what I’m interested in supporting.”

SoftBank has already made one large investment in Indonesia – having committed $2 billion through ride-sharing firm Grab Indonesia last July. Grab said it will invest the money over the next five years to accelerate development of Indonesia’s digital infrastructure.

In addition, during Son’s visit to Indonesia last August, he said that SoftBank will invest $5 billion in Indonesia, partly to develop the electric vehicle industry.

Widodo had announced last August his desire to move Indonesia’s capital from overpopulated Jakarta (30 million people in greater metropolitan area) to sparsely populated East Kalimantan province, a place previously known for its rainforests and endangered species like orangutans, sun bears and long-nosed monkeys.

The area under consideration in East Kalimantan -- near the existing Samarinda City and the port city of Balikpapan -- is 632,580 acres, about four times the size of Jakarta.

The new capital city has no name yet but will include new government offices and homes for about 1.5 million civil servants.

“It is a strategic location at the center of Indonesia, close to [a] growing urban area,” Widodo said.

Environmentalist groups oppose the new capital city on fears that construction will damage the habitat of local wildlife.