Indonesia will launch its second sovereign wealth fund, slated to hold all state-owned enterprises including the central bank, after the new leader of the Southeast Asian nation returns from overseas in two weeks.
Muliaman Darmansyah Hadad, head of BPI Danantara, the new wealth fund, made the announcement in a statement on November 9. He says the fund will begin with an initial asset base of US$600 billion.
“The forming of the new wealth fund does not need amendments to the country’s state-owned enterprise law. Instead, it will be governed by revisions to two government regulations and a presidential regulation that are currently in the drafting phase,” he says.
The central bank and six other state owned entities will come under Danantara’s portfolio in the first phase. The list includes oil and gas firm Pertamina, utility firm PLN, telecommunications firm Telkom Indonesia, Mineral Industri Indonesia, and Bank Mandiri and Bank Rakyat Indonesia.
“Additional state-owned enterprises will be included gradually to bolster Danantara’s portfolio,” Muliaman says.
Prabowo Subianto, Indonesia’s president, is currently on his first foreign trip as leader to attend the Asia Pacific Economic Cooperation summit in Peru and the G20 summit in Brazil, with stops in China, the UK and the US.
Indonesia’s other wealth fund, Indonesia Investment Authority (INA), was launched in February 2021 under Prabowo’s predecessor Joko Widodo, with an initial $2 billion. It’s aimed at attracting foreign investors to co-invest in economic development projects in Indonesia.
