Indonesia eyes private funding for Trans-Sumatra Railway

Indonesia's Ministry of Transportation is actively seeking diverse funding streams for the ambitious Trans-Sumatra Railway project, aiming to connect the vast island from Aceh in the north to Lampung in the south. Minister of Transportation Dudy Purwagandhi has opened the door for potential involvement from BPI Danantara and other private sector entities, signaling a strategic shift away from sole reliance on the state budget (APBN).

"We must innovate and not just depend on the government budget so we can get funding outside the APBN," Purwagandhi told reporters on Thursday, June 4, 2026, after a working meeting with Commission V of the House of Representatives (DPR). This approach aligns with President Joko Widodo's directive to bolster railway transportation, particularly for logistics, across various Indonesian islands, including Sumatra, Kalimantan, and Sulawesi.

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We must innovate and not just depend on the government budget so we can get funding outside the APBN.

The Ministry of Transportation will continue coordinating with the Coordinating Ministry for Infrastructure and Regional Development to finalize the project's development scheme. The goal is to create a more efficient railway transportation system, especially in regions outside Java. This initiative is seen as crucial for enhancing inter-regional connectivity and supporting economic growth and logistics distribution throughout Sumatra.

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We are developing a network on the island of Sumatra, how to connect Banda Aceh with Bandar Lampung.

Previously, PT Kereta Api Indonesia (Persero) or KAI estimated the investment required for the Trans-Sumatra Railway project to be around Rp 350 trillion. KAI President Director Bobby Rasyidin explained in a hearing with Commission VI of the DPR on Wednesday, June 3, 2026, that the project aims to connect Banda Aceh with Bandar Lampung. Currently, Sumatra's railway network is fragmented into several corridors, with operational lines including Bandar Lampung-Palembang, Bandar Lampung-Lubuklinggau, and networks in North Sumatra, Aceh, and parts of West Sumatra.

Rasyidin elaborated that integrating these lines is expected to boost passenger mobility, expedite goods distribution, and stimulate regional economic growth. KAI is currently prioritizing the construction of the Banda Aceh–Besitang line, approximately 478 kilometers long, as part of the project's foundational design. The total investment for the entire Sumatra network is projected to range from $20 billion to $25 billion USD.

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If the total for Sumatra is around Rp 350 trillion from end to end.