Bambang Ismoyo, Jakarta – Indonesia's sovereign wealth fund Danantara on Friday kicked off the first phase of its downstream industrial push, breaking ground on six projects with a combined investment value of about $7 billion (Rp118 trillion), as the government accelerates efforts to strengthen value-added industries.
The ceremonial groundbreaking was led virtually by Danantara Chief Executive Officer Rosan Roeslani and senior executives and conducted simultaneously across five locations. The projects form Phase I of Danantara's downstream program, a central pillar of President Prabowo Subianto's economic agenda.
"With the six downstream projects launched today, the total investment reaches around $7 billion," Rosan said at Danantara's headquarters in Jakarta.
Two of the projects are located in Mempawah, West Kalimantan, and focus on strengthening Indonesia's aluminum value chain. These include an integrated bauxite-alumina-aluminum processing and refining facility, as well as the second phase of the Smelter Grade Alumina Refinery (SGAR 2).
The third project is a bioethanol plant in Glenmore, Banyuwangi, East Java, jointly developed by state energy firm Pertamina and plantation company Perkebunan Nusantara (PTPN). The facility is expected to support Indonesia's biofuel ambitions and reduce reliance on imported fossil fuels. Indonesia plans to produce 15.6 billion liters of biodiesel this year, a move expected to cut fossil diesel imports by Rp 139 trillion.
Indonesia currently enforces the B40 policy, which mandates a 40% palm oil blend in biodiesel. Energy Minister Bahlil Lahadalia has said the government may raise the mandatory blend to 50% in the second half of this year pending successful trials.
Danantara also broke ground on a biorefinery project in Cilacap, Central Java, which will convert used cooking oil into green fuels, including sustainable aviation fuel (SAF), or bioavtur. The project aligns with Indonesia's push to expand renewable energy and reduce carbon emissions in the transport sector.
President Prabowo has said he wants Indonesia to become a leading global supplier of aviation fuel, as Jakarta tightens controls on exports of used cooking oil and palm oil residues. Last August, state-owned energy firm Pertamina said its aviation unit Pelita Air had used SAF made from used cooking oil on a commercial Jakarta – Bali flight for the first time.
The fifth initiative is an integrated poultry facility in Malang, East Java, aimed at strengthening national food security. Similar facilities are planned in Lampung, East Nusa Tenggara, and Gorontalo, although the Malang site was chosen as the ceremonial location for the groundbreaking.
The sixth project involves the construction of an industrial salt plant using Mechanical Vapor Recompression (MVR) technology in Gresik, East Java. The facility is intended to boost domestic salt production and reduce Indonesia's reliance on imports of industrial-grade salt. Indonesia imported 2.61 million tons of salt in 2020, with volumes remaining above 2.7 million tons annually through 2024. The government aims to stop salt imports entirely by the end of 2027, following a directive from President Prabowo.
Rosan said the government expects the projects to generate a multiplier effect for the economy, including job creation and stronger industrial linkages. "The President has stressed the need to accelerate downstream projects that have a direct impact on the economy and on society," he said.
Rosan, who is also the country's investment minister, added that downstream projects accounted for around 30% of total investment realized in Indonesia in 2025. He said the contribution, valued at about Rp584.1 trillion, marked a 43.3% increase from the previous year.
Danantara plans to continue rolling out downstream initiatives. An upstream steel plant with annual capacity of 3 million tons is scheduled to break ground next month as part of efforts to boost domestic output and reduce reliance on imported steel.
The six projects launched on Friday form part of a broader pipeline of 18 downstream initiatives, which are estimated to require total investment of $38.63 billion, or about Rp618 trillion.
Earlier reports had suggested the government would also break ground on coal downstreaming projects to convert coal into dimethyl ether (DME) on Friday, as Indonesia seeks to strengthen energy security and reduce reliance on imported liquefied petroleum gas (LPG). However, they were not part of Friday's groundbreaking agenda.