Parliament Approves Danantara Bond Plan to Fund Development
Parliament Approves Danantara Bond Plan to Fund Development
Jakarta. Sovereign wealth fund Danantara Indonesua will be allowed to issue special debt instruments known as Patriot Bonds and Merah Putih Bonds after parliament approved revisions to the country’s financial sector law on Thursday, Finance Minister Purbaya Yudhi Sadewa said
The amendments to the Financial Sector Development and Strengthening Law (P2SK) give Danantara authority to raise long-term capital to help finance national development projects and strategic investments.
“The revised law allows Danantara to issue special debt instruments, including Patriot Bonds and Merah Putih Bonds, to support capital mobilization and drive national economic growth,” Purbaya told lawmakers.
Danantara launched its inaugural Patriot Bond offering in late 2025, raising about $3.6 billion, exceeding its initial target of $3.1 billion, according to Bloomberg. The bonds, which carried five- and seven-year maturities with coupons of around 2%, were priced well below the yields offered by comparable Indonesian government securities.
Bloomberg also reported that Danantara is considering a second Patriot Bond issuance worth Rp 20 trillion ($1.11 billion) in the first half of this year. The latest round is expected to target major palm oil entrepreneurs and other prominent business figures who did not participate in the inaugural offering.
The government expects the new instruments to broaden Indonesia’s long-term funding sources while strengthening Danantara’s capacity to invest in infrastructure and other priority sectors.
Purbaya stressed that the bond issuance would be managed under strict risk-control and governance standards, saying the government would adopt professional and accountable management practices based on sound business considerations.
The finance minister also dismissed speculation that wealthy Indonesians would be required to purchase the bonds. Rumors had circulated that citizens with assets or savings exceeding Rp 3 billion would face a mandatory investment obligation.
“There is no requirement,” Purbaya told reporters at the parliament complex. “Instead, the government will provide incentives to make the instruments attractive for investors.”
He added that, based on discussions he attended at the Presidential Palace, President Prabowo Subianto had never proposed making purchases of Patriot Bonds or Merah Putih Bonds compulsory.
Beyond authorizing the new Danantara securities, the revised P2SK law also includes measures to strengthen the institutional roles of Bank Indonesia, the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS), while introducing new provisions on cryptocurrency regulation, the demutualization of the Indonesia Stock Exchange, and the establishment of a task force to combat online lending abuses and illegal online gambling.
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