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Indonesia data center market expansion and regulatory review
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2026-10-13 01:30 UTC → 2026-10-19 12:01 UTC ·
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Indonesia data center market expansion and regulatory review
Indonesia is experiencing significant growth potential in its data center market, driven by rapid digital transformation, cloud adoption, and the rise of artificial intelligence. Industry leaders have identified sectors such as finance and insurance as key drivers, while companies like PT Repower Asia Indonesia Tbk are diversifying into managed services and IT infrastructure to capitalize on these trends. However, this expansion faces critical environmental and social challenges. Government officials Coordinating Minister for Infrastructure and investment leaders have warned Regional Development Agus Harimurti Yudhoyono has noted that the while digital adoption makes data centers essential, their high demand for electricity and clean water required by these facilities must be managed to avoid compromising community ensure development does not compromise the community’s right to a healthy environment or access to basic resources. Experts suggest Investment leaders, including Danantara Chief Investment Officer Pandu Sjahrir, have advised that investors must account for environmental risks and potential public protests, citing protests early in the process. Sjahrir cited the temporary suspension of the BDx Data Centers project in Jatiluhur due to licensing and environmental issues as a cautionary example. example, suggesting Indonesia should aim to derive broader economic benefits from digital infrastructure similar to the downstreaming of the nickel industry. In response to these complexities, the Indonesian government is reviewing telecommunications deregulation to stimulate investment and lower costs, as current regulatory burdens account for approximately 13–14 percent of operator revenue. Simultaneously, members of the House of Representatives (DPR RI) are calling for rigorous feasibility studies. Lawmakers have emphasized the need to evaluate electricity and water requirements to prevent state losses, cautioning that rapid expansion without guaranteed occupancy rates could pose financial risks if funded through state-owned banks.
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- 2026-10-19 12:01 UTC Indonesia data center market expansion and regulatory review
- 2026-10-13 01:30 UTC Indonesia data center market expansion
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