BKPM Encourages Data Centre Investment Outside Java, Eyes Batam Special Economic Zone
The Investment Coordinating Board (BKPM) is encouraging investors to establish data centres outside Java, with the Batam Special Economic Zone (SEZ) being considered a strategic location for development.
Deputy for Investment Information Technology at the Ministry of Investment and Downstreaming/BKPM, Ricky Kusmayadi, said Batam's geographical proximity to Singapore makes the area highly promising for supporting the regional digital ecosystem.
"The government has prepared a focus for digital centres and data centres in the Batam area, particularly in the SEZ. Because it is close to overseas areas such as Singapore, this has become our primary concern," Ricky said, as quoted on Monday (19/5).
Ricky noted the government is also working to reduce the imbalance in digital investment, which has historically been concentrated in Jakarta and Java. By designating Batam SEZ as a priority location, the government hopes to achieve more equitable growth in national digital investment.
According to Data Center Map, there were 141 data centres operating across Indonesia as of early 2025, placing the country 13th out of 161 nations worldwide. Jakarta has the highest concentration nationally with 83 units as of 15 January 2025, followed by Batam with 9, Surabaya with 8, Bandung with 7, Denpasar and Bogor with 4 each, and Makassar with 3. Other regions have between one and two data centres.
Based on Knight Frank's Property Highlight 2024 data, the data centre sector was one of the most significant absorbers of space in industrial estates last year, accounting for approximately 33 per cent of land uptake in industrial areas along Jakarta's eastern corridor.
To attract data centre investment, Ricky said the government has prepared a range of facilities and fiscal incentives for investors, including exemptions on import duties for machinery and equipment.
"Imported machinery can be submitted to us for analysis. If it meets the criteria, a reduction of up to zero per cent can be granted," he said.
These incentives form part of the facilities embedded within the SEZ framework, which also includes simplified licensing and tax relief.
Meanwhile, Director General of Digital Government Technology at the Ministry of Communications and Digital (Komdigi), Mira Tayyiba, stressed the importance of basic infrastructure support such as connectivity, clean energy and water availability to sustain data centre operations.
"We have begun coordinating with other ministries, as many data centres are now requesting access to clean energy. The same applies to water supply for cooling systems," Mira said.
She added that equitable connectivity, including in areas outside Java such as Batam SEZ, is a government priority to create a competitive and sustainable digital investment climate.
According to Mira, the government's approach to data centre investment is not solely fiscal but also encompasses the provision of essential requirements that are key considerations for both local and global investors.
Deputy for Investment Information Technology at the Ministry of Investment and Downstreaming/BKPM, Ricky Kusmayadi, said Batam's geographical proximity to Singapore makes the area highly promising for supporting the regional digital ecosystem.
"The government has prepared a focus for digital centres and data centres in the Batam area, particularly in the SEZ. Because it is close to overseas areas such as Singapore, this has become our primary concern," Ricky said, as quoted on Monday (19/5).
Ricky noted the government is also working to reduce the imbalance in digital investment, which has historically been concentrated in Jakarta and Java. By designating Batam SEZ as a priority location, the government hopes to achieve more equitable growth in national digital investment.
According to Data Center Map, there were 141 data centres operating across Indonesia as of early 2025, placing the country 13th out of 161 nations worldwide. Jakarta has the highest concentration nationally with 83 units as of 15 January 2025, followed by Batam with 9, Surabaya with 8, Bandung with 7, Denpasar and Bogor with 4 each, and Makassar with 3. Other regions have between one and two data centres.
Based on Knight Frank's Property Highlight 2024 data, the data centre sector was one of the most significant absorbers of space in industrial estates last year, accounting for approximately 33 per cent of land uptake in industrial areas along Jakarta's eastern corridor.
To attract data centre investment, Ricky said the government has prepared a range of facilities and fiscal incentives for investors, including exemptions on import duties for machinery and equipment.
"Imported machinery can be submitted to us for analysis. If it meets the criteria, a reduction of up to zero per cent can be granted," he said.
These incentives form part of the facilities embedded within the SEZ framework, which also includes simplified licensing and tax relief.
Meanwhile, Director General of Digital Government Technology at the Ministry of Communications and Digital (Komdigi), Mira Tayyiba, stressed the importance of basic infrastructure support such as connectivity, clean energy and water availability to sustain data centre operations.
"We have begun coordinating with other ministries, as many data centres are now requesting access to clean energy. The same applies to water supply for cooling systems," Mira said.
She added that equitable connectivity, including in areas outside Java such as Batam SEZ, is a government priority to create a competitive and sustainable digital investment climate.
According to Mira, the government's approach to data centre investment is not solely fiscal but also encompasses the provision of essential requirements that are key considerations for both local and global investors.