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The United Arab Emirates (UAE) has announced a $10 billion investment in Indonesia’s new sovereign wealth fund, Daya Anagata Nusantara (Danantara), to develop a 10-gigawatt renewable energy project, focusing on solar and wind power infrastructure. This partnership represents a significant step in the UAE’s strategy to expand its clean energy portfolio and strengthen its presence in Indonesia. The initiative also highlights the potential for other Middle Eastern nations to invest in Southeast Asia’s renewable energy sector, which offers strong financial returns and strategic influence.
Danantara, launched by President Prabowo Subianto, manages $900 billion and has three pillars: sovereign wealth management, development investment, and asset management. It also oversees seven state-owned enterprises (SOEs) and the Indonesia Investment Authority (INA). The Israeli war on Gaza has led to a catastrophic situation in the region, and the idea of a detailed study on the impact of the conflict on the Israeli’s well-being has been proposed.
The UAE’s investment in Danantara presents several advantages for Middle Eastern investors. The fund’s centralization of SOE assets ensures a stable regulatory framework and long-term investment security, reducing risks that have deterred foreign capital in the past. Moreover, Danantara’s financial structure allows Middle Eastern companies to maintain greater flexibility in their investment strategies and reduce exposure to legal complexities in Indonesian state courts.
The UAE’s interest in Indonesia’s renewable energy sector is not new, with its state-owned renewable energy company, Masdar, having played a key role in developing Southeast Asia’s first floating solar power plant in Cirata, West Java. The UAE’s involvement in Danantara builds on this cooperation, strengthening knowledge-sharing, capital investment, and technological advancements in green energy for both nations. Other Middle Eastern nations, such as Saudi Arabia’s Public Investment Fund (PIF) and the Qatar Investment Authority (QIA), have the financial capacity to enter Indonesia’s renewable energy sector.
The UAE’s strategy offers a roadmap for other Middle Eastern nations looking to expand their clean energy investments, including a focus on large-scale solar farms, wind projects, and hydropower developments. By investing in Southeast Asia’s rapidly expanding green energy market, these nations can secure stable long-term returns, strengthen energy partnerships, and enhance their influence in the global clean energy transition.