Editor’s Note
This article outlines several major investment initiatives, including a significant nickel project partnership and plans to deploy billions in capital across sectors like energy and infrastructure.
EcoPro, Vale, Merdeka set to join nickel project, investment chief says. Danantara to manage $8.3 billion for investment in 2025. Private placement of Patriot bonds to big companies planned. Danantara mulls investment in Hajj lodging, US energy.
JAKARTA, Aug 26 (Reuters) – Indonesian sovereign wealth fund Danantara will invest to develop a nickel processing hub with Chinese battery and material recycler GEM, tapping into $8.3 billion in funds available for investment in 2025, an official said on Tuesday.
The project will mark Danantara’s first foray into Indonesia’s crucial nickel sector as the government seeks to capitalise on the country’s vast resources of a metal used in electric vehicle (EV) batteries. Indonesia is the world’s biggest nickel producer.
He said the project would target net-zero carbon emissions and aim to operate in a sustainable manner.
He declined to put a figure on the investment or say when it could start operating.
Asked to comment, Jakarta-based Merdeka said it had no information to share. The other companies did not immediately respond to requests for comment.
Pandu said Danantara Indonesia will manage 135 trillion rupiah ($8.31 billion) in investment funds this year, 70 trillion rupiah of which comes from dividends of state-owned companies.
The rest will come from sales of so-called Patriot bonds to Indonesian companies and a recently obtained $10 billion syndicated bank loan, he added.
Launched in February, Danantara manages all government-owned companies, which have combined assets of more than $900 billion. It is modelled on other sovereign funds such as Singapore’s Temasek.
Pandu said the fund’s decision to issue Patriot bonds had been well received among leading Indonesia companies.
Some of Indonesia’s richest people, Prajogo Pangestu, who controls the Barito Pacific Group conglomerate, Garibaldi Thohir with AlamTri Group and Franky Widjaja of Sinar Mas Group, are among those to have expressed interest, Pandu said. Widjaja’s spokesperson declined to comment, while spokespeople for the others did not respond to a request for comment.
Danantara aims by October to raise 50 trillion rupiah from the bonds, which will be sold in 5- and 7-year tranches carrying a 2% interest rate, according to a video presenting the bonds to business people. The rate is far below that of government bonds with similar terms.
Investments that Danantara is considering offshore include Hajj lodging for Indonesian pilgrims in Saudi Arabia and upstream oil and gas in the U.S., Pandu said.
