Published on November 23, 2025, by Kontan.co.id
KONTAN.CO.ID – JAKARTA. The Indonesian Investment Management Agency (BPI) Danantara plans to issue another Rp15 trillion (about $1.1 billion) worth of Patriot Bonds.
This will be the second issuance after the initial issue, which attracted a number of investors with a 2% annual coupon.
“The second Rp15 trillion Patriot Bond will be issued soon, with different investors from the first issuance,” Danantara’s Chief Investor Officer (CIO), Pandu Patria Sjahrir, told Kontan.co.id recently.
Return Concerns and Crowding Out Risk
Deni Friawan, a researcher from the Economics Department of CSIS Indonesia, assessed that the planned second issuance raises several concerns regarding the effectiveness of fund use and potential returns for investors.
He highlighted the risk of crowding out, particularly if Danantara’s investment through Patriot Bonds does not generate a significant economic impact.
“If the return or macroeconomic impact is small, funds that could be used by the private sector for more efficient expansion will instead be absorbed by Danantara,” Deni explained to Kontan.co.id on Sunday (23/11).
With the first Patriot Bonds coupon of only 2%, Deni believes the second edition coupon has the potential to be less attractive to investors.
This could pose a risk of opportunity loss, considering investors could obtain higher returns through government bonds.
“Because this is a direct request from the government, there may be other reasons. Investors may hope to gain project access or smooth business operations through involvement in Danantara,” he said.
Purpose of Funds Unclear
Deni also highlighted the unclear purpose of the second Patriot Bonds.
Danantara has been linked to various investment plans, ranging from livestock and energy to possibly supporting government programs such as the Free Nutritional Meals (MBG).
“As a sovereign wealth manager, Danantara should be focused on pursuing returns. Currently, its objectives appear too diverse,” Deni said.
Transparency and a Strong Valuation Basis Needed
Meanwhile, M. Rizal Taufikurahman, Head of the Center for Macroeconomics and Finance at Indef, assessed that the second Patriot Bonds have the potential to become an alternative financing instrument for strategic government projects.
However, he emphasized the importance of clarity regarding the use of funds and transparency in governance.
“Risks arise if this instrument relies too heavily on the valuation of state assets that do not yet generate stable cash flows,” Rizal said.
This situation could create the perception of an indirect guarantee from the government, which ultimately has the potential to lead to fiscal policy deviations.
Rizal cautioned that Danantara is still building its track record. If the projects being financed are still in the early stages or immature, Patriot Bonds could fall into the high-risk asset category, similar to government bonds that are not fully guaranteed.
“Risks that must be considered include the uncertainty of Danantara’s cash flow, project risk, regulatory risk, and the unclear level of government support,” he said.