Jakarta. Indonesia's sovereign wealth fund Danantara will take part in a coal gasification project that aims to slash the country's imports of liquefied petroleum gas or LPG, according to a minister.

President Prabowo Subianto recently summoned Energy Minister Bahlil Lahadalia for a meeting at the palace. Bahlil helms the special task force dedicated to optimizing Indonesia's downstream industry development.

According to Bahlil, the talks with Prabowo zeroed in on projects that aim to help Indonesia capture more value out of its abundant natural resources. Prabowo had greenlit 21 of such projects for the first phase, which would take approximately $40 billion in investment. This includes facilities that will produce the so-called dimethyl ether (DME) as an alternative to LPG using low-calorie coal. The government will involve the newly minted Danantara in this DME project, although Bahlil did not go into details on its role.

"We will build DME facilities that use low calorie coal to substitute our LPG imports," Bahlil told reporters in Jakarta on Monday evening.

In early 2022, American gas supplier Air Products, in partnership with the state coal miner Bukit Asam broke ground on a $2.3 billion coal gasification plant in South Sumatra. The state-owned gas company Pertamina was set to be the offtaker who would buy the DME produced by the said facility. Air Products later withdrew from the project. Some Chinese investors offered to fill in Air Products' shoes but later decided to pull out the DME project as well. Fast forward to 2025, Indonesia claimed that it could fund its coal gasification dream on its own.

"We now no longer need investors. Mr. President wants us to take advantage of our domestic resources. What we need from them [foreign investors] is the technology. The money and capital expenditure all come from the government and national private companies. We have the resources, and the offtaker will be ourselves. So this time, we will not rely on others. And yes, one of those [who we will involve in the coal gasification project] is Danantara," Bahlil said.

The possible locations for these coal-to-DME plants are South Sumatra, South Kalimantan, and East Kalimantan.

"So we will push for three or four DME projects to be built in parallel," Bahlil told the press.

Danantara is only less than two weeks old. It will consolidate the assets of seven major state-owned enterprises, namely oil and gas Pertamina; mining giant MIND ID; banks Mandiri, BNI, BRI; telecommunications company Telkom; and utility firm PLN. Bukit Asam, which had previously partnered with Air Products, is under MIND ID. Danantara will take over the assets of all other state-run enterprises by the end of this month. This will bring Danantara's total assets under management to over $900 billion, possibly placing it among the world's largest sovereign wealth funds. Danantara is also starting out with $20 billion in initial investment cash to invest in high-impact projects this year.

In September 2024, Bahlil revealed that Indonesia would spend Rp 450 trillion or approximately $27 billion in foreign exchange on imported oil and gas, including LPG, every year.