On 24 February 2025, the government has officially launched a sovereign wealth fund named
Badan Pengelola Investasi Daya Anagata Nusantara (“Danantara”). The underlying regulation of
the establishment of Danantara is Law No. 1 of 2025 on Third Amendment to Law No. 19 of 2003
on State-owned Enterprise (“Law No. 1/2025”) which was enacted on 24 February 2025
Danantara is a strategic step of the government in managing national investment for supporting
sustainable investment growth in Indonesia. It is believed that Danantara will become a booster
of economic growth from 5% to 8%. This new institution is also expected to take an important
role in consolidating state-owned enterprises (“SOE”) as well as optimizing dividend and
investment. Danantara will focus on management of investment fund in the form of sovereign
wealth fund which will be used for economic growth, infrastructure development as well as
strategic investment in vital sectors such as renewable energy, technology, and other industries.
Further, Danantara is also deemed as a super holding of SOEs which constitutes strategic and
efficient solutions in optimizing SOEs through investment of the companies’ dividends in longterm industries.
Total value of assets that will be managed by Danantara is around USD 900 billion which is larger
than the assets managed by Temasek Singapore and Khazanah Malaysia. For the initial stage,
USD 20 billion will be injected to Danantara which is obtained from efficiency of the government
expenditures. SOEs that will be put under management of Danantara, inter alia, PT Pertamina
(Persero), PT PLN (Persero), PT Bank Rakyat Indonesia (Persero) Tbk., PT Bank Negara
Indonesia (Persero) Tbk., PT Bank Mandiri (Persero) Tbk., PT Telkom Indonesia (Persero) Tbk.,
MIND ID (Mining Industry Indonesia). Besides the above SOEs, there are other SOEs that will be
under management of Danantara.
Investment Holding and Operational Holding
Under Article 3AB of the Law No. 1/2025, Danantara and the Minister of SOE will establish an
investment holding which has duties to manage investment, conduct asset empowerment in the
frame of enhancement of investment value, and perform other tasks determined by the Minister
of SOE or Danantara. The State of the Republic of Indonesia shall own 1% (one percent) of Series
A shares with privilege through the Ministry of SOE and Danantara shall own 99% (ninety-nine
percent) of Series B shares in the investment holding.
Further, under Article 3AK of the Law No. 1/2025, Danantara and the Minister of SOE will establish
an operational holding which has duties to perform operational management of SOEs, and
perform other tasks determined by the Minister of SOE or Danantara. Similar to the investment
holding, the State of the Republic of Indonesia shall own 1% (one percent) of Series A shares with
privilege through the Ministry of SOE and Danantara shall own 99% (ninety-nine percent) of
Series B shares in the operational holding
Organ
Pursuant to Article 3M of the Law No. 1/2025, organ of Danantara consists of supervisory board
and implementing body. The supervisory board has duties to supervise the management of
Danantara carried out by the implementing body while the implementing body has duties to
organize the operational management of Danantara. Further, the implementing body, in
performing their tasks, is assisted by at least 2 (two) committees, namely: investment committee
and risk management committee. These committees are obliged to provide report and
recommendation to the implementing body.
In addition to the above organs, President will form an advisory board which has duties to give
input and suggestion to the implementing body.
Challenges
The main challenge to Danantara is to gain the public trust in order to convince them that this new
institution will give significant benefit and value to Indonesian people. As we are aware, Danantara
will manage a huge investment fund which is vulnerable to misappropriation of funds and
corruptions. Hence, the supervisory board would have a significant role in overseeing the
implementation of investment by the implementing body. Additionally, Audit Board of the Republic
of Indonesia (Badan Pemeriksa Keuangan) are also entitled to audit management and financial
responsibility of Danantara.
Apart from the above, the government should convince the public on their commitment to prevent
misappropriation of funds and corruptions by means of: (i) appointing professional and competent
individuals as members of the implementing body and supervisory board; and (ii) ensuring
that the members of the implementing body and supervisory board are free from any political
interventions.
In addition, it is important for the implementing body of Danantara to explain to the public, in detail,
on their plan and strategy in managing the funds and assets of the SOEs. Also, they need to
convince the public by means of: (i) application of good corporate governance; and (ii) application
of prudential principle.
Based on the above, it is too early to conclude that Danantara will fail or succeed. It seems that
the public should give time to the management team of Danantara to perform their tasks and
prove their performance in managing the assets and dividends of SOEs properly as mandated in
the Law No.1/2025.
