Indonesia has launched a new sovereign wealth fund to manage more than US$900 billion of state assets, two weeks after its parliament approved legislative amendment paving the way for the creation.

Known as Daya Anagata Nusantara or Danantara, the wealth fund is expected to function like Singapore’s state investment firm Temasek Holdings, which holds strategic stakes in many top local companies.

Danantara will take control of government holdings in state companies, with an initial budget of $20 billion, Prabowo Subianto, Indonesia’s president, said in a speech when launching the fund.

Describing it as “an initiative that has never been done before in Indonesia”, he said Danantara “will become one of the largest sovereign wealth funds in the world”.

He said Danantara will invest in several products across a wide range of sectors, including renewable energy and food production, this year and that it will play a key role in helping the Indonesian economy grow 8% in 2025.

Indonesia launched its first sovereign wealth fund, the Indonesia Investment Authority (INA), in 2021 with an initial capital of $5 billion. INA invests in infrastructure assets such as toll roads and data centres.