The Indonesian government is intensifying efforts to develop a national data centre hub in Batam city, Riau Islands, aiming to promote a more balanced and equal distribution of investment across the country’s regions. Ricky Kusmayadi, Deputy for Investment Information Technology at the Ministry of Investment and Downstreaming, highlighted this focus during the inauguration of a major data centre in Jakarta.
Deputy Kusmayadi emphasised Batam’s strategic geographic location as a critical factor in prioritising the city for data centre development. This initiative aligns with efforts to distribute infrastructure growth beyond Java and other major islands, stimulating regional economies and technological advancement nationwide.
“The data centre infrastructure market in Southeast Asia is projected to grow by up to 200%, significantly outpacing the global average,” Deputy Kusmayadi explained. He attributed this growth to the expanding digital economy and increasing adoption of technologies such as artificial intelligence (AI), cloud computing, social media and e-commerce.
Indonesia is expected to play a pivotal role in the regional digital landscape, with data centre capacity projected to rise dramatically to 936 megawatts (MW) by 2028, marking an increase of over 210% from the current 430 MW.
Several factors make Indonesia attractive for data centre investment: rising demand for data services, improvements in connectivity, growing AI readiness, competitive energy costs and affordable land.
Deputy Kusmayadi underscored that the Batam development is part of a deliberate strategy to ensure investment flows more evenly across Indonesia’s regions, supporting sustainable economic growth and technological progress outside traditional urban hubs.
Mira Tayyiba, Director General of Digital Governance Technology at the Ministry of Communication and Digital Affairs, highlighted Indonesia’s significant potential as an investment destination for digital infrastructure. She pointed to the country’s large domestic digital economy and high internet penetration as key advantages.
Additionally, Indonesia’s vast renewable energy resources – including 207 gigawatts (GW) of solar power and 29 GW of geothermal energy potential – offer promising opportunities for sustainable data centre operations nationwide.
This strategic push to establish Batam as a major data centre hub reflects Indonesia’s commitment to fostering equitable investment distribution while capitalising on the digital economy’s growth. The government is also working on regulatory frameworks and incentives to attract further domestic and foreign investment, strengthening Batam’s position as a regional digital hub.
As reported by OpenGov Asia, the government is advancing digital sovereignty and accelerating digital transformation through the nation’s first national data centre (PDN) in Cikarang, West Java. Scheduled for completion by the end of March 2025, this facility aims to enhance data integration across ministries and government agencies, streamlining operations and improving digital service delivery.
The urgency of establishing such infrastructure became apparent following a ransomware attack on a temporary data centre in Surabaya in June 2024, which disrupted critical public services. In response, the government is prioritising cybersecurity by conducting resilience assessments and investing in advanced security technologies and skilled personnel to mitigate future risks.
While other data centre projects are underway, such as those in Batam, Labuan Bajo and the new capital Nusantara, experts emphasise decentralising data infrastructure to minimise risks and ensure the stability and security of digital services nationwide. This decentralisation effort is seen as essential to reduce dependency on any single facility and to increase the overall resilience of Indonesia’s digital ecosystem.
To build a robust and future-proof digital ecosystem, collaboration among government agencies, private sector technology firms and cybersecurity specialists is essential. Such partnerships will help close infrastructure gaps, enhance data protection and support ongoing digital transformation.
Together, these initiatives underscore Indonesia’s strategic vision to strengthen its digital infrastructure, promote equitable investment distribution and safeguard the country’s digital sovereignty amid evolving technological and cybersecurity challenges.
