UAE to Develop 10GW Renewable Energy Project in Indonesia

Along with its companies launching businesses, the UAE is planning to $10 billion in Indonesia’s sovereign wealth fund, Daya Anagata Nusantara (Danantara), Indonesia’s National Economic Council (DEN) Chairman Luhut Binsar Pandjaitan said on Thursday.

Pandjaitan said that the UAE’s Minister of Energy and Infrastructure Suhail Mohamed Al-Mazroui, personally communicated this commitment, suggesting a joint venture scheme to develop a renewable energy power plant with a capacity of 10 GWs at a cost of $10 billion.

Pandjaitan said that launch of Danantara exemplified President Prabowo Subianto’s strategic step to optimise Indonesia’s economic potential, with the investment management agency expected to oversee assets totalling up to $900 billion.

Pandjaitan also said Danantara will ensure Indonesia, which has more opportunities to bolster its economic development and transparency, in managing state-owned enterprises. The Indonesian President will officially launch Daya Anagata Nusantara Investment Management Agency (BPI Danantara) on 24 February 2025, he said.

The third amendment of Law No. 19 of 2003 on state owned enterprises (SEOs), approved during the parliament’s plenary session on 4 February 2025, legitimised the establishment of Danantara, which is expected to optimise the potential of Indonesian SOEs.

Danantara will manage assets handled by the Indonesia Investment Authority (INA) and seven major state-owned enterprises valued around $580 billion, positioning it among one of the largest sovereign wealth funds globally.

Danantara is part of Prabowo Subianto’s economic policy, aiming to leverage a national sovereign fund to consolidate state-owned enterprise resources for investment projects. The goal is to achieve an 8% economic growth target.

The fund is projected to manage assets with renewable energy, advanced manufacturing, downstream industries, and food production as primary investment sectors.

The fund was planned for launch in November last year but was delayed as the Indonesian Parliament has to enact the legislation, which was finally passed legislation early this month. The fund’s initial capital is set at $20 billion, sourced from government fiscal mergers, budget cuts, and dividends from SOEs.

Luhut Pandjaitan said that Danantara has attracted attention from various countries, especially the UAE.

Expanding Energy Cooperation

However, Luhut did not provide the names of the companies involved, nor specify which type of renewable energy would be developed but affirmed that the UAE has been paying attention to Danantara for some time and expects the progress to move very quickly.

This collaboration would not be the first between the two nations. They have previous experience in renewable energy projects, such as the joint effort involving Masdar and Indonesia’s state-owned electricity company, PLN, which developed Southeast Asia’s largest floating solar power plant in Cirata, West Java. This facility is capable of supplying electricity to 50,000 households.

Despite relying heavily on coal power, Indonesia has set ambitious climate goals under Prabowo’s administration including increasing renewable energy capacity by 75 GW by 2040. The government focuses on wind, solar, hydro, and geothermal energy. According to PLN, meeting these goals would require an estimated investment of $235 billion.