Jakarta. Danantara Indonesia aims to complete the restructuring of debt tied to the Whoosh High-Speed Railway by the first half of 2026, part of an effort to prevent the liabilities from weighing on the financial health of state railway operator Kereta Api Indonesia (KAI).

Dony Oskaria, chief operating officer of the sovereign wealth fund, said the agency has finalized its restructuring proposal and submitted an offer. The next step now rests with the government’s economic authorities.

“The offering and proposal from our side are already completed. The decision now lies with the coordinating minister (Airlangga Hartarto) and the finance minister (Purbaya Yudhi Sadewa),” Dony told reporters in Jakarta on Monday.

Indonesia’s government has been seeking ways to manage the roughly $7 billion in loans linked to the flagship rail project, which connects Jakarta and Bandung. The line, which began commercial operations in 2023, represents the country’s first high-speed railway and was built with substantial financing from Chinese lenders.

Dony said the primary goal of the restructuring effort is to improve the debt structure rather than eliminate the obligation altogether.

“The debt will remain, but we want to create a healthier structure so it will not disrupt the railway sector in the future,” he said, adding that Danantara hopes the process can be concluded within the current semester.

A quicker resolution would allow policymakers and the railway operator to move forward with broader plans to expand Indonesia’s rail network, including major electrification projects on several strategic routes.

The government has identified lines such as Jakarta–Cikampek, Jakarta–Sukabumi and Jakarta–Rangkasbitung as priorities for electrification as part of a wider push to modernize the country’s mass transportation system.

Dony warned that if KAI remains burdened by an unfavorable debt structure from the high-speed rail project, it could limit the company’s capacity to invest in future rail expansion.

“If the company is weighed down by something that ultimately weakens its financial health, then our broader vision for mass transportation transformation could also be affected,” he said.

The restructuring plan comes amid ongoing debate within the government over how to resolve the Whoosh project’s debt obligations.

Finance Minister Purbaya Yudhi Sadewa said in February that President Prabowo Subianto had not approved the use of state funds to fully repay the loans, pushing back against speculation that the government would absorb the debt through the state budget.

Purbaya said the government had yet to make a final decision on how to settle the roughly $7 billion owed to Chinese creditors for the rail line.

Earlier this month, State Secretary Prasetyo Hadi suggested the debt could potentially be covered by the state budget, though the finance minister said he was still awaiting clear direction from the president.

“If there were presidential instructions, I would act immediately — but there have been none so far,” Purbaya said previously.

Danantara, which manages state-owned assets and investment projects, has been tasked with exploring financial solutions for large infrastructure ventures, including the Whoosh rail line.

Dony said the railway is already operationally sustainable and has begun generating broader economic benefits since its launch.

“The project can sustain itself operationally. The challenge comes from the initial equity portion, which was relatively small, forcing us to rely heavily on borrowing during construction,” he said.

Resolving the debt structure, he added, would give the government and KAI greater flexibility to continue expanding Indonesia’s rail infrastructure while ensuring the financial sustainability of the national railway operator.