Indonesia aims to advance coal gasification initiatives with support from its newly established sovereign wealth fund, Danantara Indonesia, according to the country’s energy minister. As the world’s leading thermal coal producer, Indonesia has been promoting the conversion of low-rank coal into dimethyl ether to reduce reliance on LPG imports. However, earlier projects have faced setbacks due to the withdrawal of foreign investors.
The Energy Minister stated that Indonesia primarily requires technological support for upcoming projects, as the government and domestic investors, including Danantara, will cover capital expenditures. He noted that approximately four coal gasification projects are planned to proceed simultaneously in South Sumatra and East Kalimantan. However, specific details regarding the scale of these projects were not disclosed.
The coal gasification initiatives are among 21 natural resource processing projects, collectively valued at USD 40 billion, which the government aims to fast-track. As part of its efforts to strengthen energy security, Indonesia also plans to expand fuel storage capacity and construct a new refinery with a daily processing capacity of 500,000 barrels. According to the Ministry of Energy, the investment required for the refinery is estimated at USD 12.5 billion.
Launched in February 2025, Danantara is expected to eventually oversee over USD 900 billion in assets, including government holdings in state-owned enterprises. The Indonesian President has committed USD 20 billion for Danantara’s initial investment phase, which will focus on projects in natural resource processing, artificial intelligence development, and strengthening energy and food security.
(Source: Tempo)
