The Indonesian government announced on 24 February 2025, the establishment of a new Indonesian Sovereign Wealth Fund ("SWF") named, Daya Anagata Nusantara ("Danantara"), a super holding company that will manage assets of Indonesia's State-Owned Enterprise (Badan Usaha Milik Negara or "BUMN"). The establishment of Danantara was modelled after the success of Singapore's Temasek. Therefore, Danantara will act as a catalyst for consolidating BUMN assets.
The framework of Danantara is introduced in Law No. 1 of 2025 on Third Amendment to Law No. 19 of 2003 regarding State-Owned Enterprises ("BUMN Law") and the implementing regulation, Government Regulation ("GR") No. 10 of 2025 on Organization and Governance of Daya Anagata Nusantara Investment Management Agency ("GR 10/2025").
To further dive into its implementation, we provide herein our overview of Danantara, particularly on the (i) Role and Authority of Danantara, (ii) Organizational Structure, and (iii) Concluding Remarks.
Role and Authority of Danantara
Danantara is not the first SWF of Indonesia, since the former President, Joko Widodo, established the Indonesia Investment Authority ("INA"), to optimize long-term investment value through asset management and co-investments (i.e., trust funds, loan arrangement, etc.). On the other hand, Danantara is intended to manage BUMN's assets to restructure, oversee, and ultimately strengthen its financial capability. This shows that Danantara was given a broader task than INA, despite the scope of Danantara being limited to BUMN assets.
To manage the state assets, Danantara with the Minister of BUMN will establish Investment and Operational Holdings. Each holding company has different responsibilities:
- Investment Holding: managing the assets and optimizing the investment; and
- Operational Holding: managing BUMN operations.
Danantara will invest through third parties in addition to the investment in the holding companies.
For further context, kindly refer to the list of authorities of Danantara under the Article 3F (2) of BUMN Law:
- Manage dividends of the Investment Holding, Operational Holding, and BUMNs;
- Approve the increase and/or reduction of BUMNs' capitals sourced from dividends;
- Establish the Investment Holding and Operational Holding companies with the Minister of BUMN;
- Approve (with Minister of BUMN) the proposal of asset write-offs and/or debt cancellation of the Investment Holding and Operational Holding;
- Provide, receive, or collateralize BUMN assets, under the President's approval; and
- Ratify and consult with the House of Representative on the work and budget plan of the Investment Holding and Operational Holding.
In the initial stage, Danantara plans to invest in the following entities:
- PT Bank Mandiri (Persero) Tbk;
- PT Bank Rakyat Indonesia (Persero) Tbk;
- PT PLN (Persero);
- PT Pertamina (Persero);
- PT Bank Negara Indonesia (Persero) Tbk;
- PT Telkom Indonesia (Persero) Tbk;
- Mining Industry Indonesia (MIND ID); and
Notwithstanding the above, the Minister of BUMN, Erick Thohir, has further claimed that more BUMN will be consolidated by Danantara's portfolio in the future.
Organizational Structure
Danantara's organizational structure comprises the
- Supervisory Board, (ii) Managing Board, and (iii) Advisory
Board (Articles 3M and 3W of BUMN Law jo. Articles 5 and 23 of GR
10/2025). a. b. c. Supervisory Board: This board will consist of
(i) a chairperson, (ii) a deputy chairperson, and (iii)
representatives of the Minister of Economy, Minister of Finance,
Minister of BUMN, and Minister of Investment and Downstream
Industry/Head of Investment Coordinating Board, all of whom will
serve as members (Article 3N (1) of BUMN Law and Article 6 of GR
10/2025).
The term of members of the board is 5 years and they can be reappointed once more by the President. (Article 3N of BUMN Law and Article 6 (2) and (5) of GR 10/2025). This board will supervise the management and operation of Danantara by the Managing Board, including in approving the annual work and budget, evaluating the key performance indicators, approving the annual financial report, temporarily suspending the members, and other related duties (Article 3O of BUMN Law and Article 7 (2) of GR 10/2025). - Managing Board: This board is responsible for Danantara's
management and operation. As a part of the managing authority, they
will establish 3 committees, which are the (i) investment
committee, (ii) risk management committee, (iii) portfolio
operational committee. (Articles 12 and 17 of GR 10/2025).
The tenure of the Managing Board is 5 years and can be reappointed once more by the President. (Article 3Q of BUMN Law jo. Article 13 (3) and (4) of GR 10/2025). - Advisory Board: The Advisory Board provides inputs and advices
to Danantara's boards. Its members are appointed and dismissed
at the sole discretion of the President (Article 3W of BUMN Law jo.
Article 23 (3) of GR 10/2025).
Further provisions regarding Danantara's Advisory Board will be outlined in a presidential regulation (Article 23 (5) of GR 10/2025). Up to the date of this article, such presidential regulation has yet to be issued by the government.
In terms of audit, since Danantara will manage the state's assets, the State Audit Board (Badan Pemeriksa Keuangan) may undertake the financial and management audit of Danantara. (Article 3K of BUMN Law)
Concluding Remarks and Recent Developments
The establishment of Danantara aligns with the global trend in sovereign wealth fund management by leveraging Indonesia's wealth assets. For foreign businesses, Danantara's role in asset management and investment expansion will provide new avenues for potential partnerships and capital participation in Indonesia's core industries. However, investors should closely monitor the implementation of Danantara's governance, as the regulatory developments and direction of government's policies will shape the actual impact on the market. Although Danantara can potentially drive the economic growth, its execution and transparency will be important in determining whether or not it will succeed in improving the economy and infrastructure of the country.
As of 24 March 2025, Danantara has introduced its key personnel, which consist of professionals of different backgrounds. The key personnels include not only Indonesian nationals but also foreigners. Danantara has claimed they would build a team consisting of experienced professionals not limited to those of Indonesia.
Furthermore, shares ownerships at several BUMNs previously held by the state have been transferred to PT Biro Klasifikasi Indonesia ("PTBKI"). PTBKI serves as the operational holding of Danantara. Based on the information at the Indonesia Stock Exchange, the BUMNs under PTBKI are as follows: PT Bank Mandiri (Persero) Tbk, PT Bank Rakyat Indonesia (Persero) Tbk, PT Bank Negara Indonesia (Persero) Tbk, and PT Bank Tabungan Negara (Persero) Tbk, PT Semen Indonesia (Persero) Tbk, PT Telkom Indonesia (Persero) Tbk, and PT Jasa Marga (Persero) Tbk,
Shares held by the states in other BUMNs such as PT Wijaya Karya (Persero) Tbk, PT Waskita (Persero) Tbk, PT Adhi Karya (Persero) Tbk, PT PP (Persero) Tbk, and PT Krakatau Steel (Persero) Tbk, have also been planned to be transferred to PTBKI.
The consolidation of the BUMNs will not however, change the controlling rights by the state over these entities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
