Danantara Plans Efficiency-Driven Reform of Over 800 SOEs

• Danantara is restructuring over 800 Indonesian SOEs through mergers, closures, and sectoral clustering 

• With current holdings valued at US$172 billion, the reform aims to improve fiscal returns, governance, and investor confidence

By Kenzie Aryasatya, Fayza Nawra Avanitanya, Muthia Noor Safitri, Imam Fakhri Prayogo Harianto 

May 23, 2025 at 16:30 GMT+7

Indonesia’s sovereign wealth fund, Daya Anagata Nusantara (Danantara), is moving ahead with an ambitious plan to consolidate more than 800 state-owned enterprises (SOEs) and their subsidiaries, in what is set to become one of the country’s most significant institutional overhauls. 

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Operational since its inception in February 2025, Danantara was established to streamline the governance and financial performance of state assets, many of which have faced long-standing inefficiencies and overlapping mandates. 

While officials have projected the fund could eventually oversee more than US$900 billion in assets, sovereign wealth fund tracker, Global SWF, currently values its holdings closer to US$172 billion, based on equity stakes in major SOEs including Bank Mandiri, Pertamina, PLN, and Telkom Indonesia. The consolidation drive seeks to modernize state asset management and align SOEs more closely with Indonesia’s long-term economic strategy.

Danantara COO Dony Oskaria at the “DPR Economic Outlook” event, Jakarta, Tuesday (20/5/2025) | Source: ANTARA (Rizka Khaerunnisa)

The core of the restructuring is a sectoral clustering approach, which groups SOEs into key focus areas such as energy, food security, logistics, healthcare, and tourism. The main goal of the restructuring is to remove redundancy, increase strategic coherence, and gain greater capital efficiency among related business units. 

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Danantara is reviewing business lines with overlapping functions for potential mergers, while units deemed financially unviable or lacking strategic value may be closed or divested. The Ministry of State-Owned Enterprises has placed a temporary hold on mergers, acquisitions, and public listings to conduct a comprehensive performance audit. 

Danantara’s Chief Operating Officer, Dony Oskaria, said the restructuring draws from global best practices, notably Singapore’s Temasek Holdings and Malaysia’s Khazanah Nasional, which combine state ownership with market-driven governance and performance metrics.

President Prabowo Subianto officially launched Danantara at the Presidential Palace on Monday (24/02/2025) | Source: Setpres BPMI

The reform is expected to strengthen the fiscal contribution of SOEs, enhance governance standards, and create a more attractive investment environment. Authorities anticipate that greater transparency and consolidated oversight will bolster investor confidence and facilitate capital mobilization. 

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Danantara has committed to managing labor restructuring with minimum disruption, ensuring the reform process maintains public trust. The initiative was originally aligned with former President Joko Widodo’s economic modernization agenda and is expected to continue under President Prabowo Subianto, whose administration has maintained support for institutional reforms and strategic consolidation. 

As Indonesia seeks to reposition itself in the global economy, Danantara’s consolidation effort may emerge as a reference model for SOE reform across emerging markets.

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Source:

Antara

Bloomberg