JAKARTA - The government considers the success of Danantara's global debut as a positive signal for investor confidence in Indonesia.
However, the Center of Economic and Law Studies (Celios) reminded that the closer involvement of Danantara in various national development agendas could create fiscal and governance risks that need to be anticipated.
As a Sovereign Wealth Fund (SWF) and the manager of state-owned assets, Danantara has different characteristics compared to similar institutions in various countries.
Instead of focusing on attracting direct investment, Danantara first accessed the international debt market.
Through Danantara Investment Management (DIM), the institution has just issued the first global bond worth 1.5 billion US dollars. This value increased by 500 million US dollars from the initial target after investor demand reached around US$4.6 billion.
The Executive Director of CELIOS, Bhima Yudhistira, assessed that the issuance of the bonds was an effort to expand the source of funding for programs that could not be fully financed by the State Budget.
According to him, some national strategic projects are now supported through Danantara, not directly through the state budget, so it has the potential to pose quasi-fiscal risks.
Bhima also highlighted that the inflow of funds from the issuance of bonds was recorded as portfolio capital flows that could have a temporary effect on exchange rate stability.
"The strengthening factor for the rupiah exchange rate in the last week is not because of the entry of foreign investment realization such as factory construction, but one of them is triggered by Danantara's action to issue bonds," said Bhima in his statement, quoted Sunday, June 21.
On the other hand, there are concerns about the possibility of excessive use of debt as a leverage instrument, namely Danantara's asset value claims of up to US$1 trillion are still considered to require further verification, including regarding the quality of assets and their level of risk.
The increase in the amount of debt also has the potential to increase the burden of interest payments, which in the end can reduce the contribution of SOEs dividends.
In addition, the connection between Danantara and the State Budget is increasingly visible through PP Number 19 of 2026 in Article 31A which opens up space for the government to carry out state capital participation (PMN) to the Danantara investment holding to support national development and the PMN can be sourced from the State Budget.
Similarly, CELIOS Researcher, Tabita Diela, compared this condition with the practice of SWF in other countries. He cited Temasek which, at the end of March 2025, had a total debt of around 20.7 billion US dollars or equivalent to around 5 percent of the value of its net portfolio.
Based on Moody's assessment, Temasek is expected to maintain its net debt-to-market value ratio of the portfolio assets below 5 percent, with strong interest-payment capacity.
"Moody's rating agency estimates that Temasek will maintain its net debt ratio to the market value of the portfolio assets (excluding cash) at below 5 percent and the interest coverage of the fund from operations above 15X," Tabita added.
Waiting for Financial Statements
Until now, Danantara has not released a comprehensive credit profile or financial report to the public.
Danantara CEO, Rosan Roeslani, stated that the process of preparing the report took longer because it included more than 1,000 companies under Danantara's umbrella.
Based on data presented to investors, DIM has equity of 4.1 billion US dollars and total debt of 3.93 billion US dollars as of the end of April 2026. After the issuance of the latest bond worth 1.5 billion US dollars, total debt is expected to increase to around 5.43 billion US dollars, not including the potential withdrawal of revolving credit facilities.
Bhima doubts that the funds are purely for investment, not just subsidizing SOEs that are experiencing financial pressure.
"With all the liquidity that Danantara currently has, the question arises where will the funds be channeled? There is no progress that shows a project with a transparent rate of return on investment, for example, the Kampung Haji hotel complex in Saudi Arabia, the waste-to-energy project, and the Chlor Alkali and Ethylene Dichloride (CA-EDC) plant project. PT Chandra Asri Pacific (TPIA)," said Bhima.
Don't Become a Shadow of the State Budget
The issuance of large amounts of debt by Danantara, especially in foreign denominations, not only brings concerns about exchange rate risks or liquidity risks when the short tenor while the portfolio is long term. However, there is also a risk that Danantara will become a shadow APBN.
"Government obligations, for example, maintaining low energy prices and bridging the price gap, can be transferred to SOEs. For example, when the government holds fuel or electricity tariffs, Pertamina or PLN will pay compensation first," said Bhima.
When Danantara issues large amounts of debt, is there any guarantee that this fund will not be used to inject capital into energy SOEs burdened with government compensation debts or to cover cash requirements that actually originate from government energy compensation obligations?
"In Government Regulation (PP) Number 19 of 2026 which amended PP 10 of 2025 concerning the Organization and Governance of BPI Danantara, it is stated that Danantara can form an investment holding and operational holding with the president's approval. This provision strengthens Danantara's flexibility in managing state assets, but at the same time opens up greater room for the government to direct Danantara's investment structure to various sectors," explained Tabita.
Danantara's institutional flexibility is at risk of being used not only to cover fiscal obligations that should be through the APBN process, but also to finance problematic energy policies or forms of "false solutions" to the energy crisis, for example, the construction of new coal-fired power plants or coal DME projects that are questionable in terms of economic feasibility.
"Don't let Danantara deviate from its long-term investment mandate and deepen Indonesia's dependence on dirty technologies and financing schemes that obscure fiscal and climate risks in the public eye," concluded Bhima.
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