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View all search resultsState budget injection into Danantara could raise fiscal risks
Danantara is also reportedly set to launch its debut US dollar bond that could raise as much as US$1 billion in what could become a key test of foreign appetite amid growing challenges in Southeast Asia’s largest economy.
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A woman walks past the Wisma Danantara Indonesia building on May 6 on Jl. Jend. Gatot Subroto in South Jakarta. (JP/Iqro Rinaldi)
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new government regulation that formally opens the door for state asset fund Danantara to receive injections from the state budget is deepening concerns that the agency is drifting from its founding promise as a commercially driven vehicle designed to attract private capital.
Under Government Regulation No. 19/2026, which was signed on April 8 but only made publicly available in early June, Danantara may establish investment holding companies aimed at supporting national development and public services that are eligible for state capital injections in the form of cash, state assets or receivables.
Such entities, once injected with state capital, can be designated as state-owned enterprises (SOEs) serving as fiscal instruments under the new rules.
The regulation, which revises Government Regulation No. 10/2025 on Danantara’s organizational structure and management, effectively provides a legal basis for what critics see as Danantara’s role not merely as an investment holding company, but also as a state policy arm tasked with implementing government programs and policies.
When Danantara was launched in February 2025, Prabowo has ordered dividends from state-owned enterprises (SOEs), previously channelled into the state budget through the Finance Ministry, to be redirected to the fund.
Danantara has already taken in Rp 85.5 trillion (US$5.2 billion) in SOE dividends from 2024 earnings and is projected to receive as much as Rp 150 trillion from 2025 payouts.
The new rules also grant broad powers subject to presidential approval, including borrowing, pledging assets as collateral, establishing multiple investment holdings and approving key supervisory decisions, provisions experts view blur the line between commercial independence and state control.
