Indonesia’s Waste-to-Energy Revolution: Danantara’s Plan to Turn Trash into Power

Indonesia, the world’s fourth most populous country and one of Southeast Asia’s economic powerhouses, faces a dual challenge that has grown more pressing over the past decades: managing its massive urban waste and securing a clean, sustainable energy future. The country generates tens of millions of tons of solid waste every year, and much of it ends up in overfilled landfills, rivers, and even the ocean. At the same time, Indonesia continues to rely heavily on fossil fuels for electricity generation, even though it has pledged ambitious climate targets such as net-zero emissions by 2060.

Against this backdrop, the state sovereign wealth fund Danantara Indonesia has announced a landmark initiative: the launch of a series of waste-to-energy (WTE) projects by the end of October 2025. These projects will transform the nation’s mounting waste problem into an energy resource, while simultaneously advancing renewable energy goals. The move has been widely hailed as a bold step toward solving two critical issues at once—waste management and energy security.

The program’s first phase will see the initiation of eight waste-to-power plants, primarily in urban centers like Jakarta, Bandung, and Surabaya. Over time, Danantara aims to establish as many as 33 facilities nationwide, each capable of processing around 1,000 tons of waste daily while generating up to 15 megawatts of electricity.

This article explores the project in depth—why it matters, how it will work, what challenges lie ahead, and what it could mean for Indonesia’s future.

Indonesia’s Growing Waste Crisis

Indonesia produces approximately 35 million metric tons of solid waste annually, and studies suggest that nearly 61% of this waste is either improperly managed or not treated at all. Large portions of municipal waste are dumped into open landfills, which are rapidly reaching their maximum capacity. Cities like Jakarta have already been facing major waste disposal issues, with mounting piles causing both environmental and public health hazards.

Landfills in Indonesia also produce enormous amounts of methane, a greenhouse gas over 25 times more potent than carbon dioxide. Left unchecked, this not only contributes to climate change but also poses immediate risks, such as fires and explosions from landfill gas buildup.

On the waste management front, the problem has been exacerbated by population growth, rapid urbanization, and inadequate recycling infrastructure. Recycling rates remain low compared to global standards, with the majority of plastics and organic waste simply discarded into mixed waste streams.

The waste-to-energy solution represents a promising alternative. By burning or converting waste into usable electricity, the approach addresses waste disposal while generating power—effectively treating waste not as an environmental burden, but as a resource.

Indonesia’s Energy Challenge

Indonesia’s energy consumption has surged along with its economic development and population growth. However, much of its electricity still comes from coal-fired power plants, which contribute heavily to carbon emissions. The government has pledged to gradually reduce coal dependency, ramp up renewable energy, and meet climate goals.

Yet renewable energy expansion has been slow compared to regional peers. Solar and wind adoption face hurdles related to land use, intermittency, and costs. Hydropower is limited to specific geographies, and geothermal—though promising—requires large upfront investments.

Waste-to-energy, therefore, fits neatly into Indonesia’s broader energy strategy. It provides baseload power (unlike solar or wind, which are intermittent), reduces landfill waste, and cuts methane emissions while still producing electricity.

Danantara Indonesia: The Nation’s Sovereign Wealth Fund

Danantara Indonesia, formally known as Badan Pengelola Investasi Daya Anagata Nusantara, is Indonesia’s sovereign wealth fund, created to manage strategic investments that align with national development goals. While its portfolio spans infrastructure, technology, and energy, the fund has increasingly emphasized sustainable projects that balance economic returns with long-term environmental and social benefits.

The waste-to-energy program is one of Danantara’s most ambitious undertakings to date. Not only will it require substantial investment—estimates put the cost at Rp 2–3 trillion (US$180–200 million) per plant—but it also demands coordination across multiple levels of government, the national power utility PLN, private sector partners, and local communities.

By stepping into this role, Danantara signals that it is not just an investment fund, but a vehicle for nation-building and green transformation.

Project Details

The initiative’s first phase, scheduled for launch by October 2025, will include eight projects located in key urban centers. Jakarta alone may host up to four or five facilities. Other priority locations include Bandung, Surabaya, Semarang, Yogyakarta, and Bali.

Key Specifications

• Number of plants planned: 33 nationwide.
• Phase 1 (by Oct 2025): 8 plants.
• Capacity per plant: 1,000 tons of waste per day.
• Power generation: 12–15 MW electricity each.
• Land requirement: 4–5 hectares per site.
• Investment cost per unit: Rp 2–3 trillion.
• Electricity buyer: PLN (Indonesia’s state power company).
• Policy support: Elimination of tipping fees for regional governments.
• Technology: Modern waste-to-energy systems (likely incineration with emissions control, though advanced methods like gasification are also being considered).

This scale of investment is unprecedented for Indonesia’s waste sector. While past efforts to develop WTE plants faced delays due to regulatory and financing hurdles, Danantara’s involvement, along with strong government backing, makes this rollout more feasible.

The Environmental and Social Benefits

1. Reducing Landfill Dependency

By processing 1,000 tons of waste per day, each plant can significantly cut down the amount of garbage sent to overfilled landfills. This relieves pressure on local governments struggling to find new disposal sites.

2. Cutting Methane Emissions

Methane from decomposing waste is a powerful contributor to climate change. By diverting waste from landfills and converting it into energy, these projects help reduce methane emissions, aligning with Indonesia’s climate targets.

3. Creating Renewable Energy

Each facility’s 15 MW capacity translates into electricity for thousands of households. Waste-to-energy thus adds clean energy to the grid, reducing reliance on coal and contributing to the renewable energy mix.

4. Job Creation and Local Development

Construction and operation of the plants will generate employment for engineers, technicians, and waste management workers. Ancillary industries, such as recycling, logistics, and energy distribution, will also benefit.

5. Public Health Improvements

Less unmanaged waste means fewer breeding grounds for disease-carrying pests, reduced risk of toxic leachate contaminating groundwater, and cleaner urban environments.

Policy and Financing Framework

The Indonesian government has played a critical role in enabling these projects. Regulations governing waste-to-energy plants have been finalized, creating a clearer legal framework for investors. A major breakthrough came with the elimination of tipping fees—the fees local governments previously had to pay to waste processing facilities—which had deterred investment in the past.

Furthermore, PLN will purchase the electricity generated, ensuring a revenue stream for the plants. Danantara will finance the technical and feasibility studies, while private sector partners may provide technology and additional capital.

Challenges and Risks

While the program looks promising, several challenges could affect its success:

1. Technology Choice and Emissions Control
   Waste incineration, if not managed properly, can release harmful pollutants such as dioxins and heavy metals. Indonesia must adopt world-class emissions control systems to prevent environmental harm.
2. Public Opposition
   Communities often resist waste-to-energy projects due to concerns about air quality and odors. Strong community engagement and transparent communication will be essential.
3. Financing Sustainability
   With costs as high as Rp 3 trillion per plant, long-term financial viability must be ensured. Subsidies, electricity tariffs, and government incentives will all play a role.
4. Waste Sorting and Quality
   For efficient energy conversion, waste must be pre-sorted. Indonesia currently lacks robust recycling and sorting systems, which could reduce plant efficiency.
5. Regulatory Bottlenecks
   Although national regulations are in place, regional permitting, land acquisition, and environmental approvals may cause delays.

Global Comparisons

Waste-to-energy is not a new concept globally. Countries such as Japan, Denmark, and Singapore have successfully integrated WTE into their waste management and energy systems.

• Japan operates over 1,000 incineration plants, many with energy recovery, handling a large proportion of municipal waste.
• Singapore’s Tuas Incineration Plant processes thousands of tons daily while generating electricity for the grid, all within strict environmental standards.
• Denmark combines WTE with district heating, ensuring minimal waste ends up in landfills.

Indonesia’s initiative, if executed well, could place it among global leaders in waste management innovation.

The Strategic Value for Indonesia

Danantara’s WTE program is more than just an energy initiative—it is a strategic national investment with multiple benefits:

• Advances Indonesia’s climate commitments.
• Reduces landfill reliance and environmental degradation.
• Strengthens national energy security with a renewable, baseload energy source.
• Stimulates economic activity and job creation.
• Enhances Indonesia’s reputation as a leader in sustainable development in ASEAN.

Timeline and Expected Milestones

• October 2025: Official launch of the first eight projects.
• 2026–2027: Construction and commissioning of Phase 1 plants.
• 2027–2030: Expansion to additional sites, scaling up toward the 33-plant target.
• By 2035: Potential full rollout of all facilities, providing significant nationwide coverage.

Conclusion

Indonesia’s decision to harness waste as a resource through Danantara’s ambitious waste-to-power program could mark a turning point in the country’s environmental and energy trajectory. By converting trash into electricity, the nation is not only tackling its overflowing landfills but also creating a new pillar of renewable energy.

If successfully implemented, the initiative will bring cleaner cities, new jobs, and a greener energy grid—an outcome that benefits both current and future generations. Yet the road ahead is not without hurdles. Technology choices, community acceptance, financial structures, and regulatory clarity will all determine whether these projects achieve their potential.

What is clear, however, is that Indonesia has recognized that waste is not just a problem—it is an opportunity. Through Danantara’s leadership, that opportunity could soon power homes, protect the environment, and redefine how the nation manages its resources.