Danantara Indonesia launches $20B investment plan

Indonesia unveiled its ambitious new sovereign wealth fund, Danantara Indonesia, with President Prabowo Subianto announcing a massive $20 billion investment initiative aimed at propelling the nation’s growth, Reuters reported.

The fund is set to manage assets exceeding $900 billion and will channel investments into a diverse array of sectors, including metal processing and artificial intelligence, to boost the country’s economic expansion.

The launch event for the Daya Anagata Nusantara Indonesia fund, or Danantara Indonesia, was marked by grandeur as President Subianto detailed the fund’s strategy to drive development in Indonesia, the largest economy in Southeast Asia. The president’s growth target is an ambitious 8%, a significant leap from the current rate of approximately 5%.

Danantara Indonesia will be the nation’s second sovereign wealth fund, operating independently from the Indonesia Investment Authority. The new fund will hold government stakes in state firms, aiming to emulate the success of Singapore’s Temasek. However, it has already faced scrutiny, with student protests last week voicing concerns over potential mismanagement risks.

President Subianto emphasized Danantara’s commitment to strategic and efficient optimization of state-owned enterprises. He outlined plans for the investment of dividends from state companies into industries that will sustain long-term growth and transform these companies into global leaders within their sectors.

In its initial investment phase, Danantara is poised to allocate $20 billion across more than 20 projects. These include ventures in nickel, bauxite, and copper processing, artificial intelligence, oil refineries, renewable energy, and food production.

The president assured attendees, which included international dignitaries and business leaders, of the fund’s commitment to transparency, stating that Danantara is open to public audits at any time.

The structure of Danantara will consist of two main units: a holding company overseeing state companies’ operations and an investment arm. Investment Minister Rosan Roeslani, previously at the helm of Recapital Group, will serve as Danantara’s CEO.

Meanwhile, Pandu Sjahrir from Indies Capital and AC Ventures will lead the investment arm. Roeslani confirmed that Danantara will function separately from the Indonesia Investment Authority, which currently manages $10.5 billion in assets.

Among the state companies to be managed by Danantara are prominent financial institutions such as Bank Mandiri, Bank Rakyat Indonesia, and Bank Negara Indonesia, as well as energy giant Pertamina, utility provider Perusahaan Listrik Negara, and telecommunications firm Telkom (JO:TKGJ) Indonesia.

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