Published on October 14, 2025, by Project Multatuli
On paper, Danantara, the brainchild of President Prabowo Subianto, has a mission to create an “inclusive and sustainable development”. In reality, it becomes a tool for the old oligarchs to consolidate, disguised as green but funding extractive projects that damage the environment.
By Permata Adinda, edited by Viriya Singgih
A man with long tousled hair, barely covered by a piece of brown cloth, was talking to an orange-clad miner on bare land next to the forest.
Two women, dressed similarly to the tousled-haired man, slowly approached. The mine worker greeted them before inviting his three guests for a meal at the PT Weda Bay Nickel (WBN) exploration camp on Halmahera Island, North Maluku.
The incident was recorded in a viral video on social media in early June 2024. The three Tobelo Dalam or O’Hongana Manyawa people, who have lived nomadically in the Halmahera forest for at least hundreds of years and usually avoid contact with the outside world, suddenly stepped “out of their home” and asked for food from mine workers who have destroyed their living space.
This happened just a month after Tesla, the US-based electric car maker, released its 2023 Impact Report. In it, Tesla discussed the increase in Indonesia’s nickel production that could cause various problems, including those related to the environment, indigenous rights, as well as the workers’ health and safety.
Therefore, Tesla said it was exploring ideas with related stakeholders to establish a no-go zone for mining to “protect indigenous and human rights”, particularly those of uncontacted communities in Indonesia.
Survival International NGO believed Tesla’s statement referred to the O’Hongana Manyawa community. Especially, two Tesla’s business partners own nickel processing facilities in the Weda Bay Industrial Estate in Halmahera.
About two weeks after the O’Hongana Manyawa video went viral, another news emerged. BASF, a German battery raw material manufacturer, cancelled its cooperation with Eramet SA, one of the owners of PT WBN. The company initially planned to build a new nickel processing plant in Weda Bay Industrial Estate.
In March 2025, the Norwegian Government Pension Fund Global (GPFG) ethics board also recommended that its sovereign wealth fund (SWF) withdraw its investment from Eramet. The reason: Eramet was deemed responsible for or contributed to the serious environmental destruction and serious violations against the rights of isolated indigenous people.
The string of incidents showed that companies and foreign funders were increasingly careful. They were reluctant to invest in problematic projects, which could be a boomerang in the future.
In May 2025, however, two Indonesian SWFs signed a memorandum of understanding with Eramet to develop the domestic nickel industry from upstream to downstream. This would certainly include nickel projects in Halmahera, including the Weda Bay Industrial Estate, which is listed as a national strategic project (PSN).
The two entities were the Indonesia Investment Authority (INA), the SWF formed under Joko Widodo’s regime in January 2021, and Daya Anagata Nusantara (Danantara), the SWF launched by Prabowo Subianto’s government in February 2025 on a much bigger scale.
“The partnership reflects the commitment of the three parties to support world-class nickel downstreaming in Indonesia,” Pandu Sjahrir, Chief Investment Officer at Danantara, said after the MoU signing.
“This collaboration also integrates global technical capacity in the field of environmentally conscious mining that supports sustainable industrial development.”
In his statement, Pandu used jargon such as “environmentally aware mining” and “sustainable industry”.
However, he did not address the O’Hongana Manyawa people, who were displaced because their customary territory overlapped with a nickel concession, or the thousands of hectares of deforestation that have occurred in Halmahera since the nickel boom began.
From there, Danantara’s funding priorities become clear.
What is Danantara?
More than just an investment management body, Danantara is also positioned as a super holding company with the largest scale of authority and total assets in Indonesian history.
As a result, it has two separate entities under its umbrella: Danantara Investment Management, which manages investments, and Danantara Asset Management, which manages assets.
Initially, it was rumored that INA, a legacy of the Joko Widodo regime, would be merged into Danantara. Danantara officials later confirmed that the two entities would operate separately.
As of July 2025, Danantara claimed to have secured funding commitments and credit facilities from various foreign institutions totaling up to US$17 billion (Rp281.5 trillion).
Danantara plans to disburse approximately US$10 billion in the last quarter of 2025, including for Hajj Villages in Saudi Arabia, Pertamina’s upstream projects, and waste-to-energy processing plants.
Furthermore, Danantara is mandated to manage all 889 state-owned enterprises (SOEs)—including its subsidiaries and the units of these subsidiaries. As of July, the total value of assets managed by Danantara had exceeded US$1 trillion.
The government rapidly revised the State-Owned Enterprises Law, which serves as the legal basis for Danantara. Deliberations began on November 25, 2024, and the revision was ratified on February 24, 2025, the same day as Danantara’s launch.
Seven months later, the State-Owned Enterprises Law was revised again, this time with greater speed. Deliberations began on September 23. The House of Representatives voted on October 2.
Through the latest revision, the Ministry of State-Owned Enterprises was “downgraded” to the State-Owned Enterprises Regulatory Agency, which no longer has the authority to oversee Danantara.
The rapid and opaque revision of the State-Owned Enterprises Law drew protests and concerns from the public, academics, and civil society organizations.
Indonesia Corruption Watch (ICW) deemed the revision to be formally flawed and unconstitutional. Various community groups also challenged the revised State-Owned Enterprises Law through the Constitutional Court.
With such extensive authority and a history of rampant corruption within state-owned enterprises, some observers fear Danantara will repeat the corruption scandal that occurred at the Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB).
The Indonesian Corruption Watch (ICW) recorded at least 212 cases of corruption involving state-owned enterprises (SOEs) from 2016 to 2023, resulting in total state losses of Rp64 trillion.
Furthermore, Danantara must now manage a number of SOEs with poor financial records due to continued losses, including PT Garuda Indonesia and PT Waskita Karya, as well as several of its own projects with mounting debt burdens, such as the Jakarta-Bandung High-Speed Rail project.
Amidst all this, President Prabowo Subianto has mandated Danantara to invest in various national strategic projects (PSN), including dirty energy projects and mining commodity processing, which have been fraught with problems.
Extractive National Strategic Project Funding
Land acquisition and exploitation of natural resources have triggered numerous conflicts and environmental damage, as well as widened social disparities. This is evident in the implementation of national strategic projects (PSN) during Joko Widodo’s two terms in office.
Instead of conducting evaluations, the Prabowo Subianto regime continues to support various problematic PSN projects through Danantara.
In September 2025, the Ministry of Energy and Mineral Resources (ESDM) reported that 18 downstream projects had entered the Danantara feasibility study phase. Some of these projects are PSN projects.
Project Multatuli also collected data on several other PSN projects funded by Danantara based on information scattered in the mass media.
Of all these projects, Danantara’s investment in dirty and extractive energy projects such as oil refineries, coal gasification facilities, and nickel processing plants dominates.
“Financing priorities are still far from accelerating renewable energy,” said Novita Indri, a campaigner for Trend Asia.
This list of projects reflects Indonesia’s continued heavy dependence on the natural resource extraction industry.
Over the past 10 years, the three industries that have dominated Indonesia’s exports have been minerals, agriculture, and metals, according to data from The Atlas of Economic Complexity. This contrasts with neighboring countries that have shifted to derivative industries. Vietnam, for example, relies on electronics, textiles, and machinery.
In fact, various studies show that the extractive industry has triggered a multitude of social, environmental, and health problems in Indonesia, from the extraction stage to the processing of its derivative products. This includes projects supported by Danantara.
A coal gasification project to produce the alternative energy dimethyl ether (DME), for example, has caused various problems at the ground level, including air pollution, deforestation, and the displacement of local communities.
This project failed to proceed during the Jokowi administration despite holding National Strategic Project (PSN) status. The US petrochemical company, Air Products and Chemicals, withdrew from the consortium along with PT Bukit Asam, PT Pertamina, PT Kaltim Prima Coal, and PT Arutmin Indonesia.
Furthermore, the reckless development of the downstream nickel industry has led to environmental damage, the marginalization of indigenous communities, and numerous workplace accidents.
In 2024, CELIOS and CREA published a report projecting economic disparities and long-term declines in the health of residents in nickel industrial areas in Sulawesi and Maluku.
Emissions from nickel refining and coal-fired power plants are said to have the potential to cause the deaths of more than 3,800 people by 2025 and nearly 5,000 by 2030.
Total annual economic losses from air pollution are estimated to increase from US$2.63 billion (Rp43.6 trillion) in 2025 to US$3.42 billion in 2030 without significant intervention. Meanwhile, environmental degradation has the potential to cost the agriculture and fisheries sector US$387.10 million over 15 years.
At the same time, massive, land-hungry industrial expansion is causing communities to lose their land.
Farmers’ children are turning to casual labor as laborers in industrial areas. They face unsuitable work conditions: long hours, neglected safety, minimal wages, and unclear career paths.
Numerous cases of human rights violations in the National Strategic Projects (PSN)—including in downstream projects—have drawn the attention of civil society organizations and state institutions.
The harsh realities on the ground prompted residents affected by the National Strategic Project (PSN) from various regions, along with several civil society organizations, to file a formal judicial review petition for the PSN.
This petition specifically questions articles in the Job Creation Law that provide legal legitimacy for facilitating and accelerating the PSN, which in practice have actually led to environmental damage, forced evictions, and the criminalization of residents.
Just like the revision to the State-Owned Enterprises Law, the public also considers the Job Creation Law unconstitutional. Its enactment drew strong public protests.
So, what can be concluded from the marriage between PSN and Danantara?
“Both are equally problematic. It’s not 1 plus 1 equals 2, but rather minus 2,” said Bhima Yudhistira, Executive Director of CELIOS.
“That’s what happens when governance is problematic from the start.”
Oligarchy Interests
In September 2025, Danantara issued Patriot Bonds worth IDR 50 trillion. Domestic investors were expected to purchase these bonds and help fund various national strategic projects (PSN).
The launch of the Patriot Bonds received support from major conglomerates. Among them were Prajogo Pangestu, owner of the Barito Pacific Group; Boy Thohir, one of the controllers of the Adaro Group; and Franky Widjaja, founder of the Sinar Mas Group. What all three have in common? Their businesses are labeled PSN.
A list of 46 conglomerates has also circulated that have purchased Patriot Bonds, with a total of IDR 51.75 trillion raised as of September 19, 2025. When the press asked for confirmation of the data, Danantara neither confirmed nor denied it.
A number of priority green transition projects on the PSN list are massive projects involving large corporations that also operate in the dirty energy sector.
Regarding this, Bhima Yudhistira from CELIOS called PSN rife with conflicts of interest.
“This National Strategic Project (PSN) is actually a form of state facilities wasted to support private companies close to those in power,” said Bhima.
“Those who are close to the government are labeled as PSN.”
In its report, the Clean Transition Coalition identified six business groups holding energy transition projects that also operate dirty energy businesses: Barito Pacific, Adaro, Medco, Wilmar, Jhonlin, and Sinar Mas.
Of these six business groups, at least 28 individuals fall into the category of politically exposed persons (PEPs). Simply put, PEPs are individuals who currently hold or have held public office, wield power or influence, making them vulnerable to involvement in illegal activities such as bribery, corruption, and money laundering.
All of these business groups manage projects labeled as PSN.
The Adaro Group, for example, manages the Kalimantan Industrial Park Indonesia (KIPI) in North Kalimantan, which was initially touted as the largest Indonesian Green Industrial Area in the world.
Barito Pacific, through PT Chandra Asri Alkali, is building a chloralkali-ethylene dichloride plant in Cilegon, Banten. Meanwhile, Sinar Mas manages the Bumi Serpong Damai (BSD) Integrated Area.
The presence of PEPs in renewable energy projects is feared to make Indonesia’s green transition plan a prey for political elites.
“With the energy transition relying on the existence of large corporations with their dirty energy businesses, the vulnerability to corruption and policy hijacking is potentially high,” said Sayyidatiihayaa Afra, Satya Bumi Campaign Manager.
The involvement of oligarchs in Danantara is not only evident in Patriot Bonds and the projects they fund. JATAM reports that the majority of Danantara’s management are businesspeople or those affiliated with extractive businesses.
Rosan Roeslani, CEO of Danantara and Minister of Investment, is a shareholder and President Commissioner of PT Recapital Advisors. This is the investment company that serves as the parent company of the Recapital Group, a multi-sector business founded by Rosan and Sandiaga Uno.
Previously, Rosan served as Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) from 2015 to 2020. He has also held strategic positions in several Bakrie family coal companies, including PT Arutmin Indonesia, PT Kaltim Prima Coal, and PT Bumi Resources.
Dony Oskaria, Chief Operating Officer of Danantara, also serves as Head of the State-Owned Enterprises Regulatory Agency and a member of the board of commissioners of Pertamina.
Pandu Sjahrir, Chief Investment Officer of Danantara, currently serves as Deputy President Director of PT TBS Energi Utama and President Commissioner of PT Adimitra Baratama Nusantara, which holds a coal mining concession in East Kalimantan.
Furthermore, before serving as Minister of Youth and Sports, Erick Thohir, Chairman of the Danantara Supervisory Board, was also Minister of State-Owned Enterprises. He is the younger brother of Boy Thohir, one of the founders of the Adaro Group, which operates in the coal business and has recently entered the renewable energy sector.
JATAM concluded that Danantara will only benefit large business players, some of whom are close to the circles of President Prabowo Subianto and Vice President Gibran Rakabuming Raka.
Ultimately, JATAM said, Danantara has the potential to become merely a tool for “consolidating economic power.”
“[Danantara] is designed to appear legitimate, but it is inseparable from the economic and political interests of the Prabowo-Gibran regime itself,” wrote JATAM.
Oligarchy Exacerbates Inequality
Economic growth has always been a government indicator for assessing development success.
Indonesia’s gross domestic product (GDP) has indeed surged by more than 62% to reach US$1.4 trillion between 2015 and 2024. The economy has consistently grown at around 5% per year, except during the Covid-19 pandemic.
However, is economic growth aligned with public welfare? In reality, economic growth has only benefited a select few, while social inequality continues to widen year after year.
In 2024, the 40 richest people in Indonesia—0.0000141% of the population—owned assets equivalent to 17.95% of GDP. This percentage is commonly known as oligarchy intensity.
Using the Material Power Index (MPI), we can measure the existing inequality. Between 2015 and 2024, Indonesia’s MPI figure increased rapidly from 619,000 to 1.27 million.
This means that, based on GDP per capita, the average wealth of the 40 richest individuals is recorded as 1.27 million times greater than that of the average Indonesian by 2024.
Furthermore, Indonesia’s inequality is 20 times greater than that of Singapore, 7 times greater than that of Malaysia, and twice as large as that of the Philippines.
Researcher Jeffrey Winters has been highlighting the problem of extreme inequality in Indonesia since 2013.
In his study, Winters argues: “Indonesia is following a classic pattern of capitalist development: a small number of ultra-wealthy citizens experiencing rapid increases in wealth.”
From the launch of the study a decade ago until now, the root cause remains the same: wealth accumulation through extractive industries. A look at the Forbes list of the 50 richest people in Indonesia reveals that half of them own businesses in the mineral and energy sectors.
CELIOS also cites extractive industries as the root of extreme inequality in Indonesia.
On the one hand, these natural resource-extracting industries are a major contributor to state revenues, in addition to taxes. However, on the other hand, they do not contribute significantly to employment, especially an inclusive and qualified workforce.
As a result, Indonesia is currently under threat of premature deindustrialization, or the decline in the role of the manufacturing industry in the economy before a country has reached a mature level of industrialization.
Furthermore, the agricultural sector is also weakening due to agrarian conflicts and the climate crisis.
“In the last 10 years, which means before the Covid-19 pandemic, there has been a disintegration between investment and industrialization,” said Bhima Yudhistira of CELIOS.
“This means that investment is becoming increasingly low-quality. Every trillion in investment has less and less correlation with additional job creation.”
“Danantara should not be conducting business as usual, like state-owned enterprises, but rather improving the quality of the economy.”
***
To date, Indonesia’s dream of a just green energy transition remains a pipe dream.
Despite what President Prabowo Subianto has conveyed in his speeches, Danantara has never disclosed the details of its investment strategy. The public even has difficulty accessing information on the list of projects funded by Danantara, requiring civil society coalitions to compile it themselves on the Danantara Monitor website.
Danantara has never even reported on the framework for the green energy transition. This differs from SWFs in other countries, which typically implement environmental, social, and governance (ESG) frameworks and human rights due diligence (HRDD) to achieve zero-emission targets and prevent human rights violations.
Temasek, a Singapore-based SWF, for example, applies ESG and reports its portfolio and sustainability performance in detail on its official website. Meanwhile, Norway’s GPFG applied human rights protection principles in its decision to terminate its partnership with Eramet.
“International finance companies, both banks and multilaterals, are already quite aware and committed to aligning with the Paris Agreement,” said Novita Indri, a campaigner for Trend Asia.
“If their portfolios contain projects that contribute to significant emissions, destroy forests, and are part of the extractive industry, then their financing is contributing to emissions.”
Instead of a just green energy transition, the Clean Transition Coalition argues that Indonesia’s energy transition approach is limited to changing technology types, not transforming the energy management system itself.
Large corporations are said to continue to reap the lion’s share of the profits, while the government neglects to engage with the public.
Novita reminded Danantara that it is essentially managing public funds.
“When Danantara accumulates such a large investment value, and those are public funds, the portion allocated to renewable energy should be much larger. But what’s happening is that we see the government is still half-hearted in pushing for the energy transition,” Novita said.
“We’re worried that Danantara will actually become an accelerator of Indonesia’s destruction.”