SEOUL: Indonesia expanded a cooperation agreement with South Korea on Thursday relating to the construction of a new capital city on Borneo island to replace overcrowded Jakarta, paving the way for Korean firms to participate in building digital infrastructure.

The two countries initially signed an agreement in 2019 to work together on the ambitious $32 billion project, under which Indonesia will relocate its capital to Nusantara on Borneo. No timeframe has been announced yet for its completion.

The revised agreement was made during a summit between South Korean President Yoon Suk-yeol and Indonesian President Joko Widodo, commonly known as Jokowi, in Seoul.

The new agreement 'laid the groundwork for our companies to actively contribute to building the new Indonesian capital's infrastructure, electronic government and smart city systems,' Yoon told a joint news conference.

Jokowi said the two countries had already started partnerships in the development of the new capital, including in construction and water supply.

Yoon said South Korea can share its experience from building the administrative city of Sejong, which was officially launched in 2012.

Jokowi said initial construction work on the capital was under way during a visit there last month.

The Indonesian leader also said he had pushed for investment partnerships with Korea, particularly in the development of electric vehicles in Indonesia, including an integrated battery industry project with the mining and automotive steel industries. 

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