The government plans to carry out a coal gasification project into dimethyl ether (DME) in three different locations in Sumatra and Kalimantan with the potential funding by the Daya Anagata Nusantara Investment Management Agency (BPI Danantara).

This plan is one of the direct instructions from President Prabowo Subianto when holding a limited meeting with the National Energy Resilience and Downstream Task Force on Monday, March 3, 2025.

Bahlil Lahadalia, Head of the National Downstream and Energy Resilience Task Force, said this project aims to process low-calorie coal so that it can reduce imports of Liquefied Petroleum Gas (LPG).

"The government will do this so that its products can truly be marketed domestically as import substitutes," Bahlil, who is also Minister of Energy and Mineral Resources, said on Tuesday, March 4, 2025.

The funding by Danantara on this project is considered applicable, but with potential consequences.

Bisman Bakhtiar, Executive Director of the Center for Mining Energy Law Studies, said that Danantara could indeed finance the DME project, but it is very risky.

"From an investment and financial perspective, this is a bold and high-risk step," Bisman said as quoted by Katadata.co.id, on Tuesday, March 4, 2025.

He said many potential foreign investors showed interest in the downstream project, but withdrew. This was caused by the funding aspect because the DME project requires very large financing.

"For now, if the DME project is carried out 100 percent at state expense, including through Danantara, it is less feasible because of the limited funding capacity, the risks and there are still many other needs that are much more urgent for the country," Bisman cited.

He said further that the government must review and reconsider the urgency, capability and risks, while simultaneously consider supervision factors and potential deviations.

"Unless there is an external party that can be invited to cooperate to share investment and risk, this will be better and feasible," he concluded.