Jakarta. Indonesia’s sovereign wealth fund Danantara expects its annual dividends to reach up to $10 billion in the coming years, amidst a major consolidation plan of state businesses.

Danantara’s chief executive officer, Rosan Roeslani, said Tuesday that the fund boasted $1 trillion in assets with annual dividends reaching about $7 billion. Danantara is currently forging ahead with its plan to cut the number of state-run enterprises by more than half through mergers -- something which the fund hopes to do wonders business-wise. 

“If I look at the trajectory for the next five years, our dividend is maybe between $7 billion and $10 billion. So I can invest up to $40 billion for the next five years. That’s without leverage. That’s all equity money,” Rosan told the Forbes Global CEO Conference in Jakarta.

By leveraging the capital by four or fivefold, Danantara should be able to invest up to $250 billion, according to Rosan’s estimates. While Danantara has taken over 1,000 state companies, both their sizes and dividends vary. Rosan admitted that the multi-billion-dollar total dividends had mainly come from 10 companies, without breaking down the details of who the biggest contributors were. 

He went on to say how some companies under Danantara have a monopoly in their respective fields. This includes airport management via Angkasa Pura. The country’s biggest lenders -- BNI, BRI, Mandiri -- are part of its portfolio, not to mention the oil company Pertamina. State utility firm PLN -- also under Danantara's management -- holds a monopoly on the archipelagic country’s electric power sector.

“Within five years, Danantara will be much bigger, stronger, and faster. We want to reduce the number of state-owned enterprises from 1,000 to slightly above 200,” Rosan said.

Rosan later revealed to the press that the $10 billion forecasted dividend was a “conservative forecast”. He also called the major consolidation plan a mammoth task, but one that is necessary.

“We want our businesses to not only make significant contributions in terms of profitability, but also job creation, efficiency, and productivity."

Danantara is now working on possibly merging Garuda Indonesia and Pertamina’s airline subsidiary Pelita Air -- a plan that has ruffled lawmakers’ feathers due to the flag carrier’s financial troubles. The agency is also considering merging the seven infrastructure-related state enterprises into three.

To grow its investment capacity, Danantara will continue to pursue international partnerships with foreign funds. Danantara has already established a $4 billion joint investment fund with the Qatar Investment Authority, among other deals.

The fund is currently gearing up to launch an open tender early next month to pick a partner for its waste-to-energy project. The fund wants to set up facilities that convert waste into electricity in 33 cities nationwide. Danantara’s early estimates show that the project might have a price tag of Rp 90 trillion ($5.4 billion). He also claimed that investors from China, South Korea, and even Malaysia had shown interest in the project.

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