The government has announced a delay in launching its sovereign wealth fund, the Badan Pengelola Investasi (BPI) Daya Anagata Nusantara, or Danantara, awaiting until President Prabowo Subianto returns from his overseas trip in two weeks.
Officials said that they are taking a cautious approach to ensure the fund’s regulatory framework is fully established before moving forward.
Muliaman Darmansyah Hadad, Head of BPI Danantara, said forming the new sovereign fund will not require amending Indonesia’s State-Owned Enterprises (SOEs) Law. Instead, it will be governed by revisions to two government regulations (PP) and a presidential regulation (Perpres) that are currently in the drafting phase.
“There are two PPs and a Perpres being revised, which will provide the legal foundation,” Hadad said on Wednesday, November 6, 2024.
Documents detailing the Danantara Indonesia Sovereign Fund indicate that BPI Danantara will begin operations with an initial asset base of approximately US$600 billion (Rp9,429.8 trillion) and will function similarly to Singapore’s Temasek Holdings, allowing it to invest both domestically and abroad.
Seven major SOEs have been designated to fall under Danantara’s portfolio: Bank Mandiri, Bank Rakyat Indonesia (BRI), PLN, Pertamina, Bank Negara Indonesia (BNI), Telkom Indonesia, and PT Mineral Industri Indonesia (MIND ID).
Over the next several years, Danantara aims to expand its managed assets to US$982 billion (Rp15,433 trillion), positioning it as the fourth-largest sovereign wealth fund globally.
This gradual expansion will eventually include additional state-owned assets to bolster its portfolio.
Currently, the largest sovereign wealth fund in the world is Norway’s Government Pension Fund Global, managing over US$1.7 trillion.
President Prabowo envisions Danantara as a powerful tool to consolidate and leverage national assets for the welfare of the Indonesian people, aligning with the mandate set forth in Article 33 of the 1945 Constitution.
