Indonesia’s sovereign wealth fund Danantara launches “Patriot Bonds,” urging private companies to join the energy transition. (Photo: Danantara Indonesia)
Indonesia’s sovereign wealth fund Danantara, a flagship initiative of President Prabowo Subianto, has introduced “Patriot Bonds” aimed at raising IDR 50 trillion (about USD 3.05 billion). The bonds will be issued at yields below conventional benchmarks, with proceeds channeled into strategic sectors such as energy transition and waste-to-energy projects.
Danantara pushes bonds to drive corporate investment
On its official LinkedIn page, Danantara said one reason for the Patriot Bonds is Indonesia’s mounting waste crisis, which the government cannot resolve on its own. The fund framed the initiative as part of a broader push to emulate Vietnam’s Doi Moi reforms and Taiwan’s semiconductor-led growth, combining state and private-sector power to propel the country forward.
The post compared Indonesia’s waste crisis to a ticking time bomb, warning that in 2024, the amount of untreated waste had reached 20.7 million tons—enough to fill 13,800 Olympic-sized swimming pools.
Among the priorities for the Indonesian government is tackling plastic waste. Statistics show that the country produces 10 million tons of plastic annually, with 60% of it left untreated.
Indonesia is a member of the World Economic Forum’s National Plastic Action Partnership (NPAP). Speaking at an NPAP meeting on August 21, Environment Minister Hanif Faisol Nurofiq stressed that regardless of whether the Global Plastic Treaty is adopted, the government will push ahead with efforts to eliminate plastic pollution.
He noted that Indonesia will need to invest USD 21 billion by 2029 to expand landfills, integrated waste management facilities, and waste-to-energy plants to deal with plastic waste.
However, environmental advocates have criticized the government for focusing only on waste management rather than addressing plastic production at the source. Yuyun Ismawati, senior advisor at the environmental health advocacy group Nexus3 Foundation, argued that the government cannot simply support a circular economy without acknowledging the harmful impact of plastic chemicals on people and the environment.
Torry Kuswardono, Executive Director of the Pikul Foundation, echoed this view, saying that the recycling systems often cited by the government and businesses cannot solve the plastic pollution problem, as not all types of plastics are recyclable.
Singapore media: some companies already back Patriot Bonds
Danantara has not disclosed many details on its official website. However, documents seen by Bloomberg show the bonds carry a 2% coupon, with five- and seven-year tenors. Each tranche amounts to IDR 25 trillion (about USD 1.52 billion).
That yield is less than half Indonesia’s 10-year government bond yield of 6.34% as of Aug. 27, and also far below Bank Indonesia’s benchmark rate of 5%.
According to The Straits Times, major corporations from industries including mining, palm oil, food and beverage, and real estate have already subscribed.
Danantara’s Chief Investment Officer, Pandu Sjahrir, said on Aug. 26 that the government hopes Indonesia’s business community will take collective action, make some short-term profits in exchange for independence, sustainability, and long-term prosperity.
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Indonesia faces a severe waste problem, and the government has introduced Patriot Bonds to accelerate waste-to-energy development. (Image: Tom Fisk/Pexels)
Experts raise concerns over pressure and market integrity
Still, fundraising under the banner of patriotism has triggered concern among analysts. Wijayanto Samirin, an economist at Paramadina University, suggested that some companies may have joined under political pressure.
Doddy Ariefianto, a financial analyst at Binus University, stressed that the Patriot Bonds must adhere to regulations, including clear prospectus disclosures and reporting to the Financial Services Authority (OJK). Given the large fundraising size, he emphasized the need for transparency and accountability.
The Straits Times also reported that a senior Danantara official, speaking at a dinner with business leaders, insisted the government is not forcing tycoons to buy Patriot Bonds, but rather offering a way to contribute to society.
Source: Bloomberg, The Straits Times, ANTARA, Jakarta Post(1), (2)
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