Indonesia’s newly established sovereign wealth fund, Badan Pengelola Investasi Daya Anagara Nusantara, also known as Danantara, is being viewed as a major opportunity to accelerate the country’s clean energy transition. According to a recent report by the Institute for Energy Economics and Financial Analysis (IEEFA), the fund could play a key role in reducing Indonesia’s long-term dependence on fossil fuels while supporting more sustainable economic growth.
Danantara currently manages around USD 900 billion in assets and has the potential to reshape the country’s investment priorities. The report explained that Indonesia’s energy sector is still heavily dependent on state-owned companies such as Pertamina and PLN, both of which continue to rely strongly on coal, oil, and gas businesses. These companies also depend heavily on government subsidies to maintain operations and profitability.
In 2024, Indonesia reportedly provided around IDR 374 trillion, equivalent to USD 23.6 billion, in government support to these energy firms. This amount was significantly higher than the dividends returned by the companies to the government. Analysts believe this creates financial pressure on the country, especially because fossil fuel markets are highly vulnerable to global price fluctuations and rising import costs.
The IEEFA report noted that Danantara could help break this cycle by following investment approaches used by successful sovereign wealth funds in countries such as Norway and Singapore. Instead of focusing mainly on fossil fuels, the fund could increase investments in renewable energy projects that use Indonesia’s domestic resources, including solar and wind energy.
Experts also highlighted that global investors are increasingly shifting away from oil and gas-related industries and are showing greater interest in green technologies. Renewable energy companies and clean technology businesses are often achieving stronger growth and higher market valuations compared to traditional fossil fuel sectors.
The report further stated that Danantara should support strategic green industries such as battery manufacturing, electric vehicle infrastructure, and public transportation electrification. These sectors are expected to strengthen Indonesia’s energy security while creating more stable long-term financial returns.
Such investments are also aligned with Indonesia’s “Golden Vision 2045” development goals and the government’s target of achieving 8% economic growth. Analysts believe that by integrating climate goals into real investment decisions, Danantara could become an important driver of a cleaner, more resilient, and financially sustainable economy for Indonesia.
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