Danantara expands in upstream solar panel industry

Indonesia’s sovereign investment agency target silica-based supply chain as Indonesia seeks to build a complete domestic solar panel manufacturing ecosystem

Indonesia’s sovereign investment agency Danantara plans to expand investments to the upstream solar panel industry through its vast silica sand resources, aiming to establish domestic production of critical solar manufacturing materials that are currently unavailable despite abundant reserves.

Ardy Muawin, Danantara Managing Director spoke at the Katadata Policy Dialogue on Tuesday, July 28, 2026 said the government’s planned 100 Gigawatt (GW) solar power program will serve as an anchor project to accelerate the development of Indonesia’s upstream solar panel industry.

According to him, Indonesia has already developed downstream solar panel manufacturing, but key upstream components including polysilicon, ingots, wafers, and low-iron tempered glass are not currently produced domestically.

Danantara intends to invest in strategic segments to accelerate industrialization, extending the government’s downstream processing strategy beyond other minerals, including silica.

“That’s why this is not only downstream industrialization, but also upstream development, because we have abundant silica,” Ardy said during the “Katadata Policy Dialogue ‘Made in Indonesia: Building Sustainable Industrial Competitiveness,” on Tuesday, as cited by Katadata.

Vast silica reserves underutilized

Indonesia currently possesses an estimated 17 billion tons of quartz or silica sand reserves, the primary raw material for polysilicon production. Spread across Sumatra, Kalimantan, Sulawesi, and Nusa Tenggara.

The Institute for Essential Services Reform (IESR) stated, Indonesia still lacks upstream industries capable of producing polysilicon, ingots, wafers, and low-iron tempered glass, leaving the country dependent on imported materials despite its abundant natural resources.

According to the Ministry of Industry, 34 solar module factories are already operating in Indonesia with a combined production capacity of 10,944 Megawatts (MW) annually, indicating downstream manufacturers are ready to absorb domestically produced upstream materials once they become available.

Policy support seen as key

IESR Chief Executive Officer Fabby Tumiwa explained Indonesia’s abundant critical minerals provide a strong foundation in building a competitive solar energy industry and urged the National Task Force for Downstream Industrialization and Energy Security to prioritize minerals supporting clean energy technologies.

Dimas Muhamad, National Task Force Deputy Coordinator said government policy will play a decisive role in expanding the industry.

“Without policy support, such as domestic content requirements, developers and PLN will naturally choose the cheapest products. At present, the cheapest modules and solar cells come from China,” Dimas said, as cited by Katadata, on Tuesday, July 28, 2026.

He adds that the government is preparing a legal framework to support a broader solar manufacturing supply chain, aiming to accelerate the development and procurement of solar power projects in Indonesia.