Indonesia’s sovereign wealth fund Danantara on Friday kicked off the first phase of its downstream industrial push, breaking ground on six projects with a combined investment value of about $7 billion (Rp118 trillion), as the government accelerates efforts to strengthen value-added industries.
Two of the projects are located in Mempawah, West Kalimantan, and focus on strengthening Indonesia’s aluminum value chain. These include an integrated bauxite–alumina–aluminum processing and refining facility, as well as the second phase of the Smelter Grade Alumina Refinery (SGAR 2).
The third project is a bioethanol plant in Glenmore, Banyuwangi, East Java, jointly developed by state energy firm Pertamina and plantation company Perkebunan Nusantara (PTPN). The facility is expected to support Indonesia’s biofuel ambitions and reduce reliance on imported fossil fuels. Indonesia plans to produce 15.6 billion liters of biodiesel this year, a move expected to cut fossil diesel imports by Rp 139 trillion [~$8BN].
Danantara plans to continue rolling out downstream initiatives. An upstream steel plant with annual capacity of 3 million tons is scheduled to break ground next month as part of efforts to boost domestic output and reduce reliance on imported steel.
The six projects launched on Friday form part of a broader pipeline of 18 downstream initiatives, which are estimated to require total investment of $38.63 billion, or about Rp618 trillion.