Danantara development fund to help finance giant sea wall, minister says

By Romel S. Gurky

Indonesia's sovereign wealth fund Danantara has established a new development fund to finance long-term strategic projects, including the giant sea wall project, railway expansion and affordable housing programs, Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono (AHY) said on Monday.

The newly established Danantara Development Management Fund (DDMF) will complement Danantara Investment Management (DIM), which focuses on investments, while DDMF will support long-term national development projects, AHY told reporters at Wisma Danantara in Jakarta on Monday.

"As the Coordinating Minister for Infrastructure, I will likely work more closely with DDMF because one of its strategic pillars is national development and essential infrastructure," AHY said.

The fund is expected to play a role in financing large-scale infrastructure projects that require long-term capital, including the government's planned Giant Sea Wall project aimed at protecting vulnerable coastal areas from land subsidence and rising sea levels.

AHY said priority areas include Jakarta Bay as well as the Central Java coastal regions of Semarang, Kendal and Demak, where recurring tidal flooding and land subsidence have intensified the need for coastal protection infrastructure.

The minister did not disclose the size of the fund or provide details on its financing capacity.

AHY said DDMF would also support the government's efforts to accelerate railway development across the country, including the reactivation of dormant rail lines, modernization of existing networks and construction of new routes.

Projects under consideration include the Trans-Sumatra, Trans-Kalimantan and Trans-Sulawesi railway networks, which the government expects will improve passenger transport and strengthen logistics connectivity, particularly in resource-rich regions.

He said stronger rail-based logistics infrastructure could help increase productivity and enhance the value of mining and industrial supply chains.

In addition, AHY said he hoped Danantara would support the government's target of building 3 million homes through sustainable financing schemes that expand access to affordable housing.

The minister also cited water resource management and other basic infrastructure projects as potential areas for investment.

DDMF will be led by Sigit Santosa, Danantara's chief technology officer and former president director of state-owned defense manufacturer PT Pindad, AHY said.

Danantara was launched earlier this year to manage state assets and support President Prabowo Subianto's economic development agenda through strategic investments and financing initiatives.

Editing by Reiner Simanjuntak