On August 26, 2025, Indonesia’s sovereign wealth fund Danantara entered into an ambitious partnership with Chinese battery recycling giant GEM to develop a nickel processing hub in the country. Backed by a massive budget of $8.3 billion allocated for 2025, the initiative is part of Indonesia’s green industrialization strategy.
The agreement, formalized through a head of agreement, sets the framework for a green industrial district, with a clear objective: achieving net-zero carbon emissions. Danantara, in collaboration with players such as Vale Indonesia, South Korea’s EcoPro, and Merdeka Copper Gold, aims to anchor the nickel industry on a sustainable path.
Created in February 2025 following the model of Singapore’s Temasek, Danantara manages more than $900 billion in public assets. To finance its investments, it issued so-called Patriot bonds at an attractive 2% rate, well below government bonds. The ambition is to mobilize 50 trillion rupiah through these bonds over the medium term (5 to 7 years) by October.
While the nickel hub project marks Danantara’s first step into this sector, the fund is already considering other strategic investments. Among them: infrastructure to host Hajj pilgrims in Saudi Arabia and upstream oil and gas projects in the United States.
This partnership symbolizes the balance that sustainable investment must achieve: combining the responsible use of natural resources with a long-term vision to drive industrial decarbonization. Danantara illustrates how financial instruments can rally the private sector around a national project. Its example also highlights the evolution of resource-producing states, which are now seeking to integrate the value chain through high value-added, environmentally responsible industries.
Source:
