February 24, 2025 | 07:04 am
TEMPO.CO, Jakarta - Indonesian President Prabowo Subianto will launch the Sovereign Wealth Fund (SWF) Managament Agency of Nusantara, Danantara, today, February 24, 2025. He made the statement in a speech at the World Governments Summit 2025.
The Indonesian government, said Prabowo, is ready to launch the latest sovereign wealth fund, Danantara, which is estimated to manage US$900 billion in assets under management (AUM). The initial funding is targeted at US$20 billion.
"The initial funding this year will reach 20 billion US dollars. I think this will be a transformative step. We plan to start about 15 to 20 projects worth billions of US dollars, which will be a significant added value for our country," said Prabowo.
Prabowo stated that the funds in the superholding of the State-Owned Enterprises (BUMN) Danantara will be invested in strategic projects in various sectors. He also hopes that these sustainable projects will contribute to achieving Indonesia's economic growth target of eight percent over the next five years.
"Danantara, which will be launched on February 24, will invest our natural resources and state assets in sustainable and high-impact projects in various sectors, such as renewable energy, downstream industries, advanced manufacturing, food production, and others," said Prabowo at the World Governments Summit 2025.
Danantara works by gathering state-owned enterprise assets to seek funding. These assets will be used as collateral for debt or even sold.
Head of Danantara Muliaman Darmansyah Hadad referred to Danantara's role in managing the country's investments beyond the State Budget (APBN). Muliaman said the establishment of Danantara is a form of Prabowo's commitment to optimizing the management of state investments.
The President, he continued, wants integrated investment management that no longer operates independently. "For example, if there are government assets managed by ministries, they will be combined, leveraged, and managed as one. Then, what is the national investment policy like," said Muliaman at the Presidential Palace, Jakarta, on Tuesday, October 22, 2024.
Legal Umbrella for Danantara
The formation of Danantara is stipulated in the Bill on the Third Amendment to Law Number 19 of 2003 concerning State-Owned Enterprises or UU BUMN. The approval of this bill was carried out in the Plenary Session of the Indonesian House of Representatives' Commission VI for the 12th Session II of the 2024/2025 Annual Session in Nusantara II Building, Senayan, Jakarta, on Tuesday, February 4, 2025.
Member of the Indonesian House of Representatives Commission VI Darmadi Durianto stated that this agency will play a role in managing the assets of all state-owned companies. In addition, Danantara has the authority to manage dividends from state-owned enterprises. "In the past, dividends went directly to the Ministry of Finance, now they will go directly to Danantara," he told Tempo.
In the future, Danantara will have to form a state-owned enterprise holding. Darmadi said that this task will be carried out in collaboration with the Ministry of State-Owned Enterprises. Darmadi also stated that the performance of this holding will be the responsibility of the company. This means that the profits and losses incurred are not included as the profits and losses of the state.
Melynda Dwi Puspita, Ni Kadek Trisna Cintya Dewi, and Riani Sanusi Putri contributed to the writing of this article.
Editor’s Choice: State No Longer Bears SOE Losses Upon Danantara's Establishment
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