Indonesia Is Taking Out The Trash—and Taking On The Old Investment Order

详细摘要

Prabowo Subianto is reshaping Indonesia’s relationship with foreign capital, using Danantara to lead strategic joint ventures and turn national priorities into investment projects—starting with the country's mounting waste problem.

Garbage is the ultimate distressed asset. Indonesia is trying to turn a costly everyday problem into a productive national asset. Indonesia's planned waste-to-energy revolution is of a new investment strategy under President Prabowo Subianto which will have regional if not global implications.

The government's plan envisaged earlier this year calls for 33 facilities serving at least 61 districts and cities across the 17,500 or so islands of Indonesia. Some 24% of estimated national waste generation will be treated within the plan.

The driving funds behind the strategy is Danantara Indonesia, the country's second, $1 trillion AuM sovereign wealth fund. Indonesia's strategy is to demonstrate it is an active investor capable of directing it towards its own economic transformation in a time of global economic uncertainty.

Indonesia's waste-to-energy program is a microcosm of this approach. The program's combined electricity-generation capacity will reach roughly 500 megawatts when fully operational. The projects aim to address mounting urban waste while creating infrastructure that converts a persistent environmental problem into an economic asset. Organic waste accounts for roughly 52% of material in five landfills surveyed earlier this year. Organic waste creates considerable methane emissions.

Three first-phase projects in Bali, Bekasi and Bogor have already entered construction and others are shovel ready. Eight selected partners have received conditional letters of award for a second phase covering eight locations across 20 regencies and cities, with further groundbreaking targeted from early 2027.

Danantara Investment Management and Denera have appointed 34 financial institutions to a lenders panel, with indicative financing interest exceeding three times the programme's estimated requirements.

The model is significant because Danantara is not merely promoting Indonesia to prospective investors.

The programme's success will depend on commercially sound projects…

When he…

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