Indonesia has officially introduced Danantara, a sovereign wealth fund (SWF) designed to reshape the country’s investment landscape. With an initial asset pool of $20 billion, the fund is expected to optimize national wealth through investments in key sectors. The government hopes this initiative will drive Indonesia’s economic growth to 8% while attracting more foreign investors.
On February 24, 2025, President Prabowo Subianto inaugurated Danantara at the Presidential Palace in Jakarta. He emphasized its role beyond just an investment management entity, calling it a vital instrument for national development.
“The launch of Danantara is a significant milestone because this is not merely an investment fund—it must serve as a national development tool that optimizes how we manage Indonesia’s wealth,” Prabowo stated.
He further explained that Danantara is expected to redefine the management of national assets to benefit the people. The president also underscored the government’s commitment to responsible fiscal policies.
What is Danantara?
Danantara, short for Daya Anagata Nusantara, is a state-owned investment fund modeled after Singapore’s Temasek. It oversees over $900 billion in assets, including major stakes in state-owned enterprises such as Bank Mandiri, Pertamina, and Telkom Indonesia.
President Prabowo revealed that the first wave of investments—amounting to $20 billion—will be allocated to 20 large-scale projects. These projects focus on nickel, bauxite, and copper downstreaming, artificial intelligence data centers, oil refineries, petrochemical plants, food production, aquaculture protein, and renewable energy development.
“Danantara will invest our natural resources and state assets into sustainable, high-impact projects across sectors like renewable energy, advanced manufacturing, downstream industries, and food production,” Prabowo stated.
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With its substantial funds, Danantara is set to become the world’s seventh-largest sovereign wealth fund, surpassing Qatar’s SWF ($526.05 billion) and Hong Kong’s ($514.35 billion). It will also rank above GIC Private Limited, which manages $800.8 billion.
Will Danantara Attract More Foreign Investors?
Beyond managing state assets, Danantara is expected to act as a catalyst for foreign investment in Indonesia. Experts believe it could mirror the success of China and India, where high investment-to-GDP ratios have driven economic expansion.
“Danantara could serve as a financial buffer for the government, ensuring economic stability while supporting strategic initiatives,” said Herry Gunawan, a state-owned enterprise expert and Director of NEXT Indonesia.
A favorable investment climate is crucial in attracting global investors. However, success will depend on transparent regulations, policy stability, and legal certainty. Without these, investors may hesitate to commit their funds to Indonesia.
M. Rizal Taufikurahman, Head of Macroeconomics and Finance at the Institute for Development of Economics and Finance (INDEF), stressed the importance of adhering to Environmental, Social, and Governance (ESG) principles.
“For Danantara to attract international investors, it must be professionally managed, free from political interference, and aligned with ESG governance standards,” Rizal stated on February 23, 2025.
The government is also urged to offer competitive fiscal incentives and investment protections to ensure Danantara can compete with other sovereign wealth funds in the region. Rizal emphasized that investor confidence would grow if Danantara demonstrated strong commitment to attracting capital, improving state-owned enterprise efficiency, and boosting profitability—all of which could positively impact Indonesia’s economic trajectory.
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