A grab crane loads shredded municipal waste to be used as fuel at a waste-to-energy facility. Through Danantara, Indonesia is trying to turn waste into power and passive foreign investment into deals it selects, structures, and co-funds itself. (Shutterstock/Martin Mecnarowski)

Indonesia’s Activist Investment Turn Leads with Waste-to-Energy Project

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Through its Danantara sovereign wealth fund, Indonesia is co-investing in a 30-plant waste-to-energy program as it shifts from passively hosting foreign capital to directing it.

Garbage is the ultimate distressed asset. Indonesia is turning a problem into an opportunity. Its sanitation facilities are overstretched, and not all of the waste originates in Indonesia. President Prabowo Subianto warned in a speech earlier this year that almost all Indonesian landfills could be over capacity by 2028, if not next year.

Following China’s 2018 waste ban, Indonesia saw a surge in imported foreign plastic scrap (over 262,000 tons annually), contributing to microplastic pollution.

Danantara Indonesia—the country’s second sovereign wealth fund, established under President Prabowo Subianto—is tackling the problem head-on with an ambitious waste-to-energy program. The government believes its program could serve as a model for others in the developing world.

The first phase of the waste-to-energy program is already under construction at three sites, with a full 30-plant program across the same number of cities and urban conurbations generating some 500 megawatts of installed capacity when operational. Roughly speaking, that’s enough electricity to power a city of one........

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