Indonesia's sovereign wealth fund, Danantara, is set to collaborate with the United Arab Emirates (UAE) to develop 10 gigawatts (GW) of renewable energy, marking its inaugural project. The announcement was made by National Economic Council (DEN) head Luhut Binsar Pandjaitan during the Indonesia Economic Summit in Jakarta on Tuesday.

Luhut revealed that he had discussed the partnership with UAE Energy Minister Suhail Al Mazrouei, who expressed interest in forming a joint venture with several state-owned enterprises (SOEs) under Danantara’s management.

“The beauty of Danantara is that it has the authority to establish a joint venture with any company,” Luhut said, as quoted during the summit held by the Indonesia Business Council at Shangri-La, Jakarta.

The Emirati investor’s identity and the specific type of renewable energy—whether solar, wind, hydro, or geothermal—were not disclosed. However, Luhut mentioned that Abu Dhabi had been aware of Danantara’s formation for some time and expressed a desire to move forward quickly with the collaboration.

This partnership aligns with Indonesia’s goal to add 75 GW of renewable energy over the next 15 years, contributing about 70 percent of its targeted energy capacity by 2040.

According to the Energy and Mineral Resources Ministry, the plan includes 75 GW from renewables, 22 GW from natural gas, and 5 GW from nuclear power. State-owned electricity company PT PLN estimates that achieving this target will require at least USD 235 billion in investment.

Danantara, scheduled to be officially launched on February 24, aims to consolidate the assets of seven key SOEs, including Pertamina, PLN, Telkom, MIND ID, and state-owned banks BRI, BNI, and Bank Mandiri.

With an initial capital of USD 20 billion sourced from government budget cuts and SOE dividends, the fund is expected to manage assets exceeding USD 900 billion.

This collaboration is part of President Prabowo Subianto’s broader agenda to accelerate 15 multibillion-dollar megaprojects without external financing, focusing on renewable energy, advanced manufacturing, downstream industries, and food production.

The UAE has already made its mark in Indonesia’s renewable sector through Masdar’s investment in Southeast Asia’s first floating solar power plant in Cirata, West Java. In 2024, Masdar and PLN signed an agreement to expand the plant’s capacity from 192 megawatt-peak to 500 megawatt alternating current (MWAc).

Government data indicates that the UAE contributed USD 32.7 million in foreign direct investment (FDI) to Indonesia in 2024, ranking as the country’s 37th largest FDI source.