Indonesia’s newly established sovereign wealth fund, Danantara, [1] has garnered significant interest from the United Arab Emirates (UAE) for potential collaboration on renewable energy projects. This partnership aims to develop an impressive 10 gigawatts (GW) of renewable energy capacity, marking a major step towards Indonesia’s ambitious climate goals.
Danantara, which consolidates assets from several Indonesian state-owned enterprises, is yet to launch on February 24, 2025, officially. The fund is part of President Prabowo Subianto’s economic policy, aiming to achieve an 8% economic growth target with assets worth around $900 billion. Collaboration with the UAE is expected to contribute significantly to this goal by focusing on renewable energy, advanced manufacturing, downstream industries, and food production.
Despite heavy dependence on coal power, Indonesia has set ambitious climate goals under President Prabowo’s administration, including increasing renewable energy capacity by 75 GW by 2040. According to PLN, meeting these goals would require an estimated investment of $235 billion.
During the Indonesia Economic Summit, Luhut Pandjaitan, Chairman of the Indonesian National Economic Council, revealed that UAE Energy Minister Suhail Al-Mazrouei expressed keen interest in establishing a joint venture to develop the renewable energy projects. This partnership aligns with Indonesia’s goal to increase its renewable energy capacity by 75GW by 2040.
The UAE’s interest in Danantara is not new. Abu Dhabi has been paying attention to the fund for some time, and the collaboration is expected to move forward quickly. This partnership will build on previous successful projects, such as the joint effort between Masdar and Indonesia’s state-owned electricity company, PLN, which developed Southeast Asia’s largest floating solar power plant in Cirata, West Java.
The collaboration between Danantara and the UAE is poised to create a significant impact on Indonesia’s renewable energy landscape, contributing to the country’s sustainable development goals and enhancing its energy security.
Sources:
[1] Indonesia’s sovereign fund Danantara draws UAE interest for green energy projects https://www.reccessary.com/en/news/id-market/uae-interest-indonesia-danantara-renewable-energy