Indonesia Launches $20 Billion Sovereign Wealth Fund Danantara
Danantara aims to drive development and optimize state enterprises across diverse sectors.
JAKARTA - Indonesia has officially launched a new sovereign wealth fund named Danantara Indonesia, with an initial investment commitment of $20 billion aimed at supporting a wide array of projects, from metal processing to artificial intelligence.
This announcement was made by President Prabowo Subianto at a ceremony held at the Merdeka Palace in Jakarta.
Danantara Indonesia, with expected management of over $900 billion in assets, is designed to enhance economic growth, increasing it from the current rate of approximately 5% to a target of 8%.
This marks the establishment of Indonesia's second sovereign wealth fund, following the Indonesia Investment Authority (INA), which will operate independently from Danantara.
The new fund will hold government stakes in state-owned enterprises and is modeled after Singapore's Temasek, although it has faced scrutiny from the public.
Recent protests involving thousands of students expressed concerns regarding potential mismanagement associated with the fund.
President Prabowo stated that Danantara Indonesia represents a strategic approach to optimizing state-owned enterprises by reinvesting dividends from these companies into sectors that can foster long-term growth.
"Not only are we going to invest state companies' dividend payments into industries that support long-term growth, but we will also transform our state companies to become world leaders in their respective sectors," he highlighted.
In its inaugural round of investments, Danantara intends to allocate funds to more than 20 projects encompassing nickel, bauxite, and copper processing, advancements in artificial intelligence, the establishment of oil refineries, renewable energy initiatives, and food production enhancements.
This extensive range of investments is intended to bolster Indonesia's economic landscape significantly.
To ensure accountability, President Prabowo emphasized the fund's commitment to transparency, declaring that Danantara would be subject to audits by any interested parties, as it is owned by the public.
The organizational structure of Danantara includes two primary units: a holding company responsible for overseeing operations of state firms and an investment arm to manage capital allocation.
Investment Minister Rosan Roeslani has been appointed as the chief executive, with Pandu Sjahrir, managing partner at Indies Capital, leading the investment division.
Currently, the Indonesia Investment Authority manages $10.5 billion in assets, which includes investments from international co-investors such as the Dutch pension fund APG Asset Management and the Abu Dhabi Investment Authority.
Danantara will oversee several prominent Indonesian state enterprises, including major banks such as Bank Mandiri, Bank Rakyat Indonesia, and Bank Negara Indonesia, state energy company Pertamina, utility provider Perusahaan Listrik Negara, and telecommunications firm Telkom Indonesia.
This announcement was made by President Prabowo Subianto at a ceremony held at the Merdeka Palace in Jakarta.
Danantara Indonesia, with expected management of over $900 billion in assets, is designed to enhance economic growth, increasing it from the current rate of approximately 5% to a target of 8%.
This marks the establishment of Indonesia's second sovereign wealth fund, following the Indonesia Investment Authority (INA), which will operate independently from Danantara.
The new fund will hold government stakes in state-owned enterprises and is modeled after Singapore's Temasek, although it has faced scrutiny from the public.
Recent protests involving thousands of students expressed concerns regarding potential mismanagement associated with the fund.
President Prabowo stated that Danantara Indonesia represents a strategic approach to optimizing state-owned enterprises by reinvesting dividends from these companies into sectors that can foster long-term growth.
"Not only are we going to invest state companies' dividend payments into industries that support long-term growth, but we will also transform our state companies to become world leaders in their respective sectors," he highlighted.
In its inaugural round of investments, Danantara intends to allocate funds to more than 20 projects encompassing nickel, bauxite, and copper processing, advancements in artificial intelligence, the establishment of oil refineries, renewable energy initiatives, and food production enhancements.
This extensive range of investments is intended to bolster Indonesia's economic landscape significantly.
To ensure accountability, President Prabowo emphasized the fund's commitment to transparency, declaring that Danantara would be subject to audits by any interested parties, as it is owned by the public.
The organizational structure of Danantara includes two primary units: a holding company responsible for overseeing operations of state firms and an investment arm to manage capital allocation.
Investment Minister Rosan Roeslani has been appointed as the chief executive, with Pandu Sjahrir, managing partner at Indies Capital, leading the investment division.
Currently, the Indonesia Investment Authority manages $10.5 billion in assets, which includes investments from international co-investors such as the Dutch pension fund APG Asset Management and the Abu Dhabi Investment Authority.
Danantara will oversee several prominent Indonesian state enterprises, including major banks such as Bank Mandiri, Bank Rakyat Indonesia, and Bank Negara Indonesia, state energy company Pertamina, utility provider Perusahaan Listrik Negara, and telecommunications firm Telkom Indonesia.
