Indonesia’s sovereign wealth fund, Danantara, is gauging interest from the nation’s top business figures and institutions for a bold fundraising plan—proposing to issue IDR 50 trillion ($3.1 billion) in “patriot bonds” with coupons well below the prevailing market rate, according to people familiar with ongoing private talks.
Those briefed on the plan say Danantara aims to issue the bonds in two tranches—five- and seven-year notes of IDR 25 trillion each—targeting an October 1 launch. Proceeds are earmarked for the country’s waste-to-energy initiatives as Danantara positions itself as a vehicle both for economic progress and national impact.
The planned bonds will carry a 2% coupon, as detailed in materials seen by Bloomberg, a return less than half of Indonesia’s central bank benchmark rate as well as yields on similar government bonds, which currently stand at 5.8% and 6.1%.
Danantara’s reference to “trading short-term gains for a lasting legacy” underscores the patriotic pitch behind the bonds, appealing for investors to forego current yield in pursuit of longer-term national benefit.
In a recent LinkedIn post, the sovereign fund contextualized the issuance as impact investing, citing Indonesia’s mounting waste crisis—where more than 20 million tonnes of unmanaged trash threaten to overwhelm the nation’s infrastructure.
The bond is similar to the impact-first funds, mainly targeting traders that look to invest in a cause regardless of return, Danantara said, suggesting the bond placement will target influential domestic stakeholders in a private deal.
Set up earlier this year and reporting assets of $1 trillion, Danantara oversees nearly 900 state-owned enterprises, a scale that, if confirmed, would rank among the world’s largest sovereign funds. This is seen as a linchpin for President Prabowo Subianto’s push to reignite Indonesia’s growth ambitions reminiscent of the 1990s.
Mandiri Sekuritas is slated to manage the offering, according to sources, while investor discussions reportedly took place over the past several weeks. No term sheets have been signed, and details could change as negotiations continue.
The patriot bond proposal is Danantara’s latest funding initiative as it readies new investments at home and abroad. The wealth fund’s portfolio has already been bolstered by an estimated $7 billion in dividends from state entities, and it has recently secured approval for a $10 billion unsecured revolving loan from foreign lenders.
