Danantara Issues USD 1.5 Billion in Bonds. What Are the Risks?

The Center of Economic and Law Studies (Celios) has criticised the inaugural bond issuance by PT Danantara Investment Management worth USD 1.5 billion, or approximately Rp 26.7 trillion. Concerns have been raised that the issuance risks creating interest payment burdens that could drain dividends from state-owned enterprises (SOEs) and impose a shadow liability on state finances. Celios Executive Director Bhima Yudhistira responded that the debt issuance is a solution to fund programmes that cannot be covered by the state budget (APBN). “Some national strategic projects (PSN) are being charged to Danantara rather than the APBN, and this creates a quasi-fiscal risk,” he said in an official statement cited on Saturday, 20 June 2026. Celios noted that large-scale debt issuance by Danantara, particularly in foreign currency denominations, raises concerns about exchange rate risk and liquidity risk when issuing short-tenor instruments while the resulting investments or portfolios are long-term in nature. There is also the risk of Danantara becoming a shadow APBN. Worries have emerged regarding the transparency of the debt’s utilisation. “Government obligations, for example maintaining low energy prices and covering price differentials, could be transferred to become a burden on SOEs. For instance, when the government holds down fuel or electricity tariffs, Pertamina or PLN will pay the compensation first,” Bhima stated. With Danantara issuing large amounts of debt, Bhima questioned whether there is any guarantee that these funds will not be used to inject capital into energy SOEs that are burdened by government compensation debt, or to cover cash needs that actually stem from government energy compensation obligations. Celios is also concerned about how Danantara manages capital with excessive debt. Danantara’s current assets of USD 1 trillion are also described as a claim that has not been verified regarding asset liquidity and the risk level per asset type. The consequence of the large debt issuance is the emergence of interest payment burdens that drain dividends from SOEs. Danantara has also not explained in detail the use of funds from the inaugural bond issuance denominated in US dollars, or the Danantara Global Bond. Danantara CEO Rosan Roeslani stated that the proceeds from the bond issuance are split into 5-year and 10-year tenors, each absorbing USD 750 million. He said the Danantara Global Bond issuance, denominated in US dollars, was oversubscribed by more than three times. This, Rosan noted, also demonstrates that global investor interest in Indonesia remains high. Danantara initially targeted an inaugural issuance of USD 1 billion. However, after Rosan conducted a series of roadshows to several global financial centres, investor demand rose to USD 4.6 billion, or approximately Rp 81.5 trillion (assuming an exchange rate of Rp 17,725 per US dollar). Consequently, the inaugural bond issuance was set at USD 1.5 billion, or around Rp 26.5 trillion.