The NDB operates on a different principle to the Bretton Woods institutions: countries must become shareholders by contributing capital before they can access financing. This membership-based model gives borrowing countries a greater stake in the institution’s governance while aligning access to capital with ownership. For Indonesia, the US$1 billion commitment is therefore not merely a fee for entry but an investment in securing long-term access to an alternative development-finance architecture.
Under President Dilma Rousseff, the NDB’s emerging 2027–2031 strategy (Opens in new window) reflects an ambitious attempt by the Global South to reshape development finance around technological transformation, economic sovereignty and low-carbon growth. The bank seeks to not only provide capital but reduce dependence on Western-dominated financial systems and expand strategic autonomy among emerging economies.
For Jakarta, the appeal is obvious. The withdrawal of American support (Opens in new window) from Indonesia’s Just Energy Transition Partnership (JETP) reinforced concerns that reliance on Western financing frameworks leaves national priorities vulnerable to political cycles abroad. Membership in the NDB therefore represents a hedge against uncertainty in an increasingly multipolar world.
Energy transition lies at the centre of this recalibration. The NDB’s emphasis on local-currency (Opens in new window) financing could reduce exposure to exchange-rate volatility while supporting investment in renewable energy, grid modernisation, battery storage and critical minerals infrastructure. Its focus on artificial intelligence, tokenised finance and green technologies also aligns development finance with the realities of a new industrial era in which energy security, digital systems and climate resilience are increasingly interconnected.
Yet Jakarta’s decision also raises difficult questions. Unlike many multilateral lenders that attach policy conditionalities, the NDB emphasises “country systems” (Opens in new window), relying on domestic legal and procurement frameworks. For governments seeking greater control over industrial policy, this offers an attractive alternative. But sovereignty alone is not governance.
Indonesia’s experience illustrates the trade-offs. President Prabowo Subianto’s sovereign wealth vehicle, Danantara (Opens in new window), consolidates major state-owned enterprises under a single umbrella, creating a platform through which NDB financing can flow into strategic projects without burdening the state budget. Supporters see efficiency; critics see (Opens in new window) concentration of power. This “Prabowo paradox” reflects a broader tension: institutions designed to accelerate development may also weaken independent oversight. As Danantara manages tens of billions of dollars in investments, transparency and internationally recognised governance standards will become increasingly important.
