Jakarta. Sovereign wealth fund Danantara announced on Wednesday that Indonesia would break ground on its Hajj Complex megaproject in Mecca later this year.

Indonesia wants to build a “village” dedicated to its pilgrims near Islam’s most significant mosque, the Masjid al-Haram, in Mecca. 

Danantara recently struck a $500 million deal to acquire Novotel Makkah Thakher, an already operational hotel that is around 2.5 kilometers away from the mosque. The agreement includes 14 land plots spanning 4.4 hectares, on which Indonesia will build more towers and a shopping center. According to Danantara, construction over this land will begin this year, although the fund did not say the exact month. The agency has also prepared an undisclosed amount of capital to get the work started. 

“Our focus is to make sure that every step is prudent, measured, and provides long-term benefits. We are building this Hajj Complex as a cross-generation, strategic project,” Danantara’s chief investment officer Pandu Sjahrir said.

This further development will bring the total lodging capacity in the Thakher area from around 4,383 pilgrims to around 22,000 individuals, about 10% of Indonesia’s annual Hajj contingent. The additional hotel towers will enter operations by 2029, which the fund said would depend on the permit and the project’s readiness.

Danantara is awaiting the results of a bid for a land that is also close to Masjid al-Haram, but lies in the Western Hindawiyyah area. Indonesia claimed to be among the top two contenders out of the 90 bidders vying for this spot. Saudi authorities will pick the investor deemed capable of developing the area according to the Mecca master plan.

Shortly after bringing home the Novotel deal last month, Danantara’s boss Rosan Roeslani told reporters that the further developments of the Thakher land would cost up to $800 million. The land put on bid has a fixed price tag of $750 million. This, alongside the $500 million Novotel deal, brings the total known investment for this Hajj Village to around $2 billion. Rosan at the time said that the construction on the Thakher area would begin in Q4 2026.

“We are not renting this land. It now belongs to the Indonesian government through Danantara. This is the first land in Mecca acquired by a non-Saudi entity,” Rosan said on Dec. 17. 

The Saudi government has allowed foreign property ownership, starting January 2026. The oil-rich kingdom let Indonesia — the world’s largest Muslim-majority country — send 221,000 pilgrims in the last Hajj season. Hajj is the major pilgrimage that capable Muslims must perform at least once in their lifetime. Beyond Hajj, approximately 2 million Indonesians go on the minor pilgrimage of Umrah annually.