Jakarta. Sovereign fund Danantara’s multi-billion-dollar patriot bonds has been “fully subscribed”, and a huge chunk of the proceeds will go into powering Indonesia’s dream of turning its waste problem into electricity, according to the agency’s top brass. 

Danantara is selling what they call “patriot bonds” at below-market yields to raise up to Rp 50 trillion or around $3 billion in a private placement scheme. In other words, Danantara sells the bonds directly to private investors, specifically the country’s wealthiest tycoons, rather than as part of a public offering. The fund’s chief executive officer, Rosan Roeslani, told reporters on Wednesday that the bonds had gained massive popularity amongst Indonesia’s businesspeople. The investment agency has already decided on where the money should go.

“We have met the target. The Rp 50 trillion bonds have been fully subscribed, and we will use the proceeds mainly for waste-to-energy projects, basically, renewable energy,” Rosan told the press in Jakarta. 

A waste-to-energy plant burns trash to generate steam that powers turbines. Danantara is planning to set up such facilities in 33 heavily polluted cities, possibly starting with the metropolis of Jakarta and gradually reaching Bali. The plan is expected to lessen the sub-national government’s financial burden as they have been paying landfills to manage the waste all this time. According to Rosan, Danantara plans to hold a tender to select its project partner by the end of the month. 

“Investors from China, South Korea, Japan, the Netherlands, Germany, Singapore, and so on are also keen on taking part in the [waste-to-energy] project,” Rosan said.

“They find our open and very transparent [tender] process to be attractive. ... Investors don't only pay attention to the returns, but they want to see whether it can provide a positive impact on health, environment, and the local communities.”

State-run utility firm PLN will purchase the power generated by these plants at a flat tariff of 20 cents ($0.20) per kilowatt-hour. Danantara’s estimates put a price tag of between Rp 2 trillion and Rp 3 trillion on the conversion of 1,000 tons of waste. These costs also derive from the investments required to set up the supporting infrastructure. Early estimates show that processing 1,000 tons of trash can generate 15 megawatts, which Rosan claimed to be enough for 20,000 households.