March 7, 2025 • 6 mins
In this episode, Michelle navigates through significant developments affecting Southeast Asia's economic scene. She begins with an overview of top stories, focusing on Indonesia's sovereign wealth fund and the U.S. exit from the Just Energy Transition Partnership (JETP). Michelle delves into Danantara's investment objectives, exploring associated risks and strategic management approaches. The discussion then shifts to the impact and implications of the U.S. withdrawal from JETP, followed by insights into the future of Southeast Asia's renewable energy and international partnerships. The episode concludes with a wrap-up and a call to follow the podcast for ongoing insights.
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Episode Transcript
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(00:00):
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, is Indonesia’s new sovereign wealthfund, Danantara, a golden opportunity or a
risky affair?
Second, the United States exit from the JustEnergy Transition Partnership threatens three
(00:22):
billion dollars in green financing forIndonesia and Vietnam.
Let's dive into our first story.
On the twenty-fourth of February 2025,Indonesian President Prabowo Subianto,
accompanied by former presidents Susilo BambangYudhoyono and Joko Widodo, launched Danantara,
(00:43):
Indonesia's new sovereign wealth fund.
The presence of these two former leadershighlighted the historic and politically
supported nature of this launch.
The creation of Danantara marks a significantmoment in Indonesia's economic landscape as it
aims to consolidate and leverage the assets ofseven major state-owned enterprises.
(01:04):
The establishment of Danantara did not comewithout its challenges.
It took longer than anticipated to launch dueto the need for embedding the fund within the
regulatory framework.
Specifically, this involved amending the law toallow the fund to assume certain management
functions of state-owned enterprises.
(01:25):
This was achieved through the third amendmentto Law Number Seventeen of 2003 on State-Owned
Enterprises, which cleared the regulatoryhurdles for Danantara's launch.
Danantara, which stands for Daya AnagataNusantara, meaning the future strength of the
Archipelago, is set to function as aninvestment vehicle akin to Singapore's
state-owned multinational investment firm,Temasek.
(01:48):
By consolidating the assets of significantIndonesian state-owned enterprises, Danantara
aims to attract international investments anddrive economic growth.
While the potential benefits of Danantara areimmense, there are also risks associated with
this new venture.
The fund must navigate the complex landscape ofinternational investments and ensure
(02:10):
transparency and accountability in itsoperations.
Additionally, the success of Danantara willheavily depend on the strategic management of
its assets and the ability to foster confidenceamong both domestic and international
investors.
As we consider the implications of Danantara,it's essential to recognize its potential to
(02:30):
enhance Indonesia's economic resilience andglobal standing.
However, the journey ahead is fraught withchallenges that require careful management and
strategic foresight.
Our second story today takes us into thecomplex world of international climate
financing, focusing on the recent withdrawal ofthe United States from the Just Energy
(02:51):
Transition Partnership, also known as JETP.
This move threatens three billion dollars ingreen financing for Indonesia and Vietnam, two
countries that are pivotal in Southeast Asia'sshift from coal to renewable energy.
The JETP is a critical mechanism designed tohelp Southeast Asian nations achieve their
(03:11):
decarbonization goals.
It aims to facilitate the transition fromhigh-emission coal-fired power generation to
low-carbon renewable energy sources.
However, with the United States stepping back,the financial support that was once a beacon of
hope for these nations now faces uncertainty.
The Trump administration's decision to withdrawfrom JETP, as confirmed by Treasury officials,
(03:37):
marks another instance of the U.S.
distancing itself from international climatecommitments.
This executive order not only impacts Indonesiaand Vietnam but also South Africa, which was
relying on over one billion dollars of U.S.
funding.
The majority of these funds were earmarked ascommercial loans, which are now in jeopardy.
(03:59):
Despite this setback, Paul Butarbutar, head ofthe JETP Secretariat in Indonesia, indicated
that there remains room for collaboration withthe United States in renewable energy
development, provided it aligns with U.S.
interests.
On the other hand, Fabby Tumiwa, ExecutiveDirector of the Indonesian Institute for Energy
Economics, suggests that Indonesia shoulddiversify its approach.
(04:24):
He advises focusing on improving the investmentclimate to attract more foreign capital into
the National Power Supply Plan, rather thansolely relying on U.S.
partnerships.
Indonesia's journey towards a green transitionis heavily dependent on foreign investment,
with an estimated annual funding requirement offorty billion dollars for renewable energy
(04:45):
development.
While the country secured twenty billiondollars in energy transition funds from JETP in
2022, the U.S.
withdrawal casts a shadow over futurecommitments.
The Prabowo government has described JETP as a"failed program," highlighting the complexity
of transitioning from Indonesia's entrenchedcoal industry.
(05:09):
In light of these developments, Germany andJapan have stepped up to co-lead JETP, ensuring
that the original plan proceeds without U.S.
leadership.
This change in leadership underscores theimportance of global cooperation in achieving
energy transition goals and the need forSoutheast Asian countries to adapt to shifting
geopolitical landscapes.
(05:31):
As Southeast Asia navigates these challenges,the region's ability to adapt and attract
diverse international partnerships will becrucial.
The transition to renewable energy is not justan environmental imperative but a strategic
economic opportunity that can enhance regionalstability and prosperity.
(05:52):
Alright, that's a wrap for this episode.
If you enjoyed this brief, and would like tostay updated on the latest episodes, don’t
forget to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
Welcome back to the Southeast Asia MarketsDaily Brief.
I’m your host, AI Michelle.
Here are our top stories today...
First, is Indonesia’s new sovereign wealthfund, Danantara, a golden opportunity or a
risky affair?
Second, the United States exit from the JustEnergy Transition Partnership threatens three
(00:22):
billion dollars in green financing forIndonesia and Vietnam.
Let's dive into our first story.
On the twenty-fourth of February 2025,Indonesian President Prabowo Subianto,
accompanied by former presidents Susilo BambangYudhoyono and Joko Widodo, launched Danantara,
(00:43):
Indonesia's new sovereign wealth fund.
The presence of these two former leadershighlighted the historic and politically
supported nature of this launch.
The creation of Danantara marks a significantmoment in Indonesia's economic landscape as it
aims to consolidate and leverage the assets ofseven major state-owned enterprises.
(01:04):
The establishment of Danantara did not comewithout its challenges.
It took longer than anticipated to launch dueto the need for embedding the fund within the
regulatory framework.
Specifically, this involved amending the law toallow the fund to assume certain management
functions of state-owned enterprises.
(01:25):
This was achieved through the third amendmentto Law Number Seventeen of 2003 on State-Owned
Enterprises, which cleared the regulatoryhurdles for Danantara's launch.
Danantara, which stands for Daya AnagataNusantara, meaning the future strength of the
Archipelago, is set to function as aninvestment vehicle akin to Singapore's
state-owned multinational investment firm,Temasek.
(01:48):
By consolidating the assets of significantIndonesian state-owned enterprises, Danantara
aims to attract international investments anddrive economic growth.
While the potential benefits of Danantara areimmense, there are also risks associated with
this new venture.
The fund must navigate the complex landscape ofinternational investments and ensure
(02:10):
transparency and accountability in itsoperations.
Additionally, the success of Danantara willheavily depend on the strategic management of
its assets and the ability to foster confidenceamong both domestic and international
investors.
As we consider the implications of Danantara,it's essential to recognize its potential to
(02:30):
enhance Indonesia's economic resilience andglobal standing.
However, the journey ahead is fraught withchallenges that require careful management and
strategic foresight.
Our second story today takes us into thecomplex world of international climate
financing, focusing on the recent withdrawal ofthe United States from the Just Energy
(02:51):
Transition Partnership, also known as JETP.
This move threatens three billion dollars ingreen financing for Indonesia and Vietnam, two
countries that are pivotal in Southeast Asia'sshift from coal to renewable energy.
The JETP is a critical mechanism designed tohelp Southeast Asian nations achieve their
(03:11):
decarbonization goals.
It aims to facilitate the transition fromhigh-emission coal-fired power generation to
low-carbon renewable energy sources.
However, with the United States stepping back,the financial support that was once a beacon of
hope for these nations now faces uncertainty.
The Trump administration's decision to withdrawfrom JETP, as confirmed by Treasury officials,
(03:37):
marks another instance of the U.S.
distancing itself from international climatecommitments.
This executive order not only impacts Indonesiaand Vietnam but also South Africa, which was
relying on over one billion dollars of U.S.
funding.
The majority of these funds were earmarked ascommercial loans, which are now in jeopardy.
(03:59):
Despite this setback, Paul Butarbutar, head ofthe JETP Secretariat in Indonesia, indicated
that there remains room for collaboration withthe United States in renewable energy
development, provided it aligns with U.S.
interests.
On the other hand, Fabby Tumiwa, ExecutiveDirector of the Indonesian Institute for Energy
Economics, suggests that Indonesia shoulddiversify its approach.
(04:24):
He advises focusing on improving the investmentclimate to attract more foreign capital into
the National Power Supply Plan, rather thansolely relying on U.S.
partnerships.
Indonesia's journey towards a green transitionis heavily dependent on foreign investment,
with an estimated annual funding requirement offorty billion dollars for renewable energy
(04:45):
development.
While the country secured twenty billiondollars in energy transition funds from JETP in
2022, the U.S.
withdrawal casts a shadow over futurecommitments.
The Prabowo government has described JETP as a"failed program," highlighting the complexity
of transitioning from Indonesia's entrenchedcoal industry.
(05:09):
In light of these developments, Germany andJapan have stepped up to co-lead JETP, ensuring
that the original plan proceeds without U.S.
leadership.
This change in leadership underscores theimportance of global cooperation in achieving
energy transition goals and the need forSoutheast Asian countries to adapt to shifting
geopolitical landscapes.
(05:31):
As Southeast Asia navigates these challenges,the region's ability to adapt and attract
diverse international partnerships will becrucial.
The transition to renewable energy is not justan environmental imperative but a strategic
economic opportunity that can enhance regionalstability and prosperity.
(05:52):
Alright, that's a wrap for this episode.
If you enjoyed this brief, and would like tostay updated on the latest episodes, don’t
forget to click ‘Follow’ in your podcast app.
Thanks again for listening, and hope to catchyou next time.
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