Danantara Picks French, Chinese and Local Winners for Indonesia's Massive Waste-to-Energy Expansion

JAKARTA, Investortrust.id — Indonesia's sovereign wealth fund Danantara Indonesia has selected eight consortiums—including French environmental giants, Chinese energy companies and domestic infrastructure firms—to develop the second phase of the country's ambitious waste-to-energy (WtE) program, underscoring rising foreign investor interest in Southeast Asia's largest green infrastructure market.

The projects, spread across 20 cities and regencies, are designed to convert municipal waste into electricity while helping Indonesia tackle one of the world's largest waste management challenges.

Waste management has become one of Indonesia's most pressing infrastructure bottlenecks, with overflowing landfills, rapid urbanization and growing electricity demand increasing pressure on policymakers.

Through Danantara, President Prabowo Subianto's administration is positioning waste-to-energy as a strategic industry capable of attracting foreign capital, reducing landfill dependency, improving urban sanitation and supporting Indonesia's renewable energy transition.

The program also signals Danantara's growing role as a national infrastructure investor beyond its traditional focus on state-owned enterprises.

Global Heavyweights Join Local Champions

PT Danantara Investment Management (DIM), together with its renewable energy subsidiary PT Daya Energi Bersih Nusantara (Denera), awarded conditional development rights for eight Waste-to-Energy projects after receiving 68 applications from 85 pre-qualified bidders.

The results revealed a competitive balance between international expertise and domestic participation.

Four winning consortiums are led by Indonesian companies partnering with overseas technology providers, while the remaining four are headed by firms from France and China.

Among the international winners are SUEZ, one of the world's largest water and waste management companies, which secured the Medan Raya project, and Veolia, the French environmental services giant selected for the Semarang Raya facility.

Chinese participation includes Everbright, a major waste-to-energy developer that won the Bekasi Regency project through the Everbright Cemerlang Energy Consortium, while another China-backed consortium will develop the Yogyakarta Raya project.

Local-led consortiums secured projects in Lampung Raya, Serang Raya, Surabaya Raya and Bogor Raya 2, reflecting the government's push to build domestic engineering capacity alongside foreign technology transfer.

Investor Confidence in Indonesia's Green Infrastructure

DIM Chief Executive Officer Pandu Sjahrir said strong participation from global waste management companies reflects increasing confidence in Indonesia's infrastructure sector.

"The participation of leading Waste-to-Energy companies demonstrates that Indonesia is increasingly viewed as an attractive investment destination. We see this as an opportunity to accelerate technology transfer, strengthen domestic capabilities and develop Indonesia's waste management ecosystem," Pandu said in a statement released Monday.

Conditional Awards, Not Final Contracts

The selected consortiums have received only Conditional Letters of Award (CLoA), meaning none of the projects has yet reached financial close.

Before securing final contracts, developers must complete feasibility studies, establish joint venture companies, obtain regulatory approvals and secure project financing.

Danantara said reserve bidders have been identified should any winning consortium fail to meet the required milestones.

"Our evaluation covered technical credentials, financial strength, implementation capability, commercial readiness, strategic value, risk management and long-term commitment to Indonesia," said Fadli Rahman, Investment Director at DIM and CEO of Denera.

He added that independent technical, legal and commercial advisers were involved throughout the selection process to ensure transparency and adherence to international governance standards.

Building Indonesia's Circular Economy

The second-phase projects follow the launch of the first batch of Waste-to-Energy developments under Presidential Regulation No. 109/2025, which designated the facilities as National Strategic Projects.

Groundbreaking for the first project, located in Denpasar, Bali, took place last week. The plant is designed to process 1,500 metric tons (about 1,650 U.S. tons) of municipal waste per day and is expected to begin commercial operations in the first half of 2028.

According to Denera, the Bali facility alone is expected to create up to 1,200 green jobs, including approximately 500–1,000 construction workers and around 200 permanent operational employees, with priority given to local hiring.

Industry leaders say the projects should complement—not replace—Indonesia's broader waste management strategy.

Edy Supriyanto, chairman of the Indonesian Plastic Recycling Association (ADUPI), said Waste-to-Energy facilities should process only residual waste after recyclable materials have been separated.

"Waste-to-Energy is part of the solution, but it must be integrated with waste reduction, recycling and the circular economy," Edy said. "Good governance and collaboration with existing recycling businesses and informal waste collectors will determine whether these projects succeed over the long term."