Launch of Indonesia's Danantara Investment Authority Postponed Amid Regulatory Review

JAKARTA, investortrust.id – Deputy Finance Minister Thomas Djiwandono announced on Wednesday, January 15, 2025 that the launch of the Danantara Investment Authority, initially planned for January 2025, has been delayed. The postponement stems from the government's need to ensure a clear regulatory framework for the state-owned superholding entity.

"This is primarily because the President feels the regulatory framework must be clearer, ensuring better outcomes in the long term," Thomas stated during a visit to the IDN Headquarter in Jakarta. He was referring to President Prabowo Subianto, whose vision for creating Danantara is to establish a superholding entity that consolidates state-owned enterprises (SOEs) under one umbrella to enhance efficiency, leverage assets for greater funding capacity, and attract foreign investment.

Thomas clarified that the delay is unrelated to the process of transferring government assets to Danantara from Ministry of State-Owned Enterprises (SOEs), which currently hold shares in the enterprises on the government behalf. While he refrained from detailing the "complicated conditions" delaying the launch, he emphasized, "The core issue is not about assets."

Thomas explained that Danantara is envisioned as a superholding entity, similar to models adopted by other countries, such as Singapore’s Temasek Holdings. This concept aligns with the ongoing streamlining of Indonesia’s SOEs under State-Owned Enterprises Minister Erick Thohir.

"The President envisions a model akin to Temasek’s leveraging approach," Thomas said.

The consolidation of SOEs under Danantara, he added, is expected to enhance funding capabilities for large-scale projects, particularly in green industrialization efforts.

Thomas outlined potential funding strategies for Danantara, including collaborations with international partners from countries like Qatar and the United Arab Emirates. These partnerships aim to secure financing for key projects without relying solely on asset-based mechanisms.

"We should look for ways to pool stronger funding sources, not necessarily asset-based," he explained.

The delay underscores the government’s focus on ensuring a solid foundation for Danantara as it aims to become a pivotal institution in driving Indonesia's economic growth and industrial transformation.