Aiming for 8% GDP Growth, The Indonesian Government seeks to attract global investments and drive developments of key industries with its new SWF Danantara.
Indonesia launched Danantara this month, a new sovereign wealth fund which is designed to boost economic growth and attract foreign investment. President Prabowo Subianto has set an ambitious goal of achieving 8% GDP growth within his first term, highlighting the importance of large-scale investments for sustainable development. The SWF is a key strategy to help reach this growth target.
Unlike the earlier SWF, Danantara has the authority to directly manage state-owned enterprises (SOEs), approve capital increases, and oversee corporate restructuring through mergers, acquisitions, and spin-offs.
Danantara, officially known as the Daya Anagata Nusantara Investment Management Agency (BPI Danantara), aims to manage state-owned assets, boost foreign capital inflow, and strengthen Indonesia’s economic resilience. With an initial capital of at least $61 billion, the fund aspires to be one of Southeast Asia’s largest investment entities, modeled after Singapore’s Temasek and the UAE’s Mubadala.
The Indonesian government already plans to invest $40 billion through Danantra, and kickoff 21 strategic projects focused on energy, agriculture, fisheries, and forestry sector.
According to the news agency Antara, investments into projects will include the downstream processing of natural resources like nickel, bauxite, and copper, along with the development of data centers, artificial intelligence, oil refineries, petrochemical plants, food and protein production, aquaculture, and renewable energy initiatives.
Attracting Foreign Direct Investment (FDI) Indonesia has historically struggled with low investment levels due to a shallow domestic financial sector and low savings rates.
Danantara aims to break this cycle by positioning Indonesia as an attractive investment destination for large-scale projects exceeding USD1 billion.
The fund has already drawn interest from major investors in the United States, Middle East, North Asia, and Southeast Asia.
Infrastructure Development and Job Creation Danantara will channel investments into infrastructure projects that are labour-intensive as well as enhance connectivity, logistics, and industrial growth.
By prioritizing renewable energy, AI-driven technologies, and manufacturing, the fund is expected to create high-value jobs and drive technological advancements. Rosan Roelani, Chief Executive Officer of the Danantara Investment Management Agency emphasised that the main goal of investment is to have a sustainable impact, particularly by generating jobs.
Enhancing Economic Resilience by focusing on sustainable and equity-based investments, Danantara aims to reduce Indonesia’s reliance on external debt too.
The fund will be managed professionally to ensure productive capital utilization, reinforcing fiscal stability and reducing economic volatility.
Roelani explained that the Indonesian government is not only attracting foreign investment but also collaborating to offer co-investment opportunities through Danantara.
President Prabowo Subianto has pledged USD 20 billion as the first wave of investment under Danantara, prioritising natural resource processing, AI development, and energy and food security. The government also expects dividend inflows from state-owned enterprises amounting to 90 trillion rupiah ($5.4 billion) in 2025, further strengthening the fund’s capital base.
Unlike the Indonesia Investment Authority, Danantara is not required to have co-investors for its projects, allowing greater flexibility in decision-making. Chief Investment Officer Pandu Sjahrir emphasized that the fund’s commercial approach will focus on profitability and sustainable economic activity.
As the Minister of Investment, Roelani says that Danantara is expected to play a key role in achieving the target of 8% economic growth by 2029.
By strategically investing in high-impact sectors and maintaining financial discipline, the sovereign wealth fund is set to propel Indonesia toward its long-term goal of achieving high-income status by 2045.
