Indonesia's Infrastructure Investment - PwC
Annual infrastructure investment is projected to increase from approximately US$117 billion in 2024 to US$291 billion by 2050. The transport sector is expected to remain the largest investment sector, while investment in the electricity, digital infrastructure, water, and social infrastructure sectors is also projected to rise. Greater private sector participation, innovative financing models, and stronger project execution capabilities will be crucial factors in supporting the Golden Indonesia 2045 agenda.
Jakarta, 31 August 202<0xC2>6 – Indonesia’s infrastructure needs are expected to increase significantly over the next 25 years. Annual infrastructure investment is projected to rise from around US$117 billion in 2024 to more than US$291 billion by 2050, according to the PwC Indonesia Infrastructure Outlook 2025–2050 report published today. This report is based on findings from the PwC Global Infrastructure Outlook 2025–2050, which projects global cumulative infrastructure investment to reach US$151.1 trillion by 2050. In this context, Indonesia is expected to become one of the primary destinations for infrastructure investment, driven by urbanisation, economic growth, digital transformation, and the increasing need for basic services.
Five priority sectors have been identified in this report that are expected to shape Indonesia’s next infrastructure development cycle: transport, electricity, water, digital infrastructure, and social infrastructure. These five sectors will play a vital role in supporting Indonesia’s long-term development agenda, including economic transformation, inter-regional connectivity, energy transition, digital growth, and human resource development.
“Indonesia is entering a new phase of infrastructure development. Annual infrastructure investment is projected to increase from around US$117 billion in 2024 to more than US$291 billion by 2050, creating infrastructure opportunities worth US$5.4 trillion over that period. If economic growth exceeds baseline projections, annual investment needs could even reach approximately US$320 billion by 2050. To capture these opportunities, greater mobilisation of private investment, closer collaboration between the public and private sectors, and more innovative financing schemes are required,” said Agung Wiryawan, PwC Indonesia Infrastructure Leader. “The scale of these investment needs presents not only opportunities for investors but also supports Indonesia’s long-term economic growth and development agenda.”
Transport, electricity, and water will be the primary sectors in Indonesia’s future infrastructure development cycle. Transport is expected to remain the largest infrastructure investment opportunity in Indonesia, with annual investment value projected to nearly triple, from US$50.2 billion in 2024 to US$148 billion by 2050. This investment growth is driven by sustained urbanisation, increasing trade flows, and the need to strengthen inter-island connectivity through the construction of roads, ports, airports, and railway networks.
Meanwhile, the electricity sector is projected to grow from US$5.7 billion in 2024 to US$16.6 billion per year by 2050. This increase reflects growing investment in renewable energy, grid modernisation, energy storage, and transmission infrastructure. The development of renewable energy, electrification, and the rising demand for electricity due to industrialisation, electric vehicles, and data centres are expected to be the main drivers of growth in this sector.
Investment in the water sector is projected to increase from US$5.6 billion in 2024 to US$17.2 billion per year by 2050. This growth is driven by efforts to expand piped water access, reduce water loss, and improve service reliability. This sector is becoming increasingly important as Indonesia aims to achieve universal access to safe and potable water by 2045.
Digital infrastructure is projected to increase from US$3.2 billion in 2024 to US$5.0 billion by 2050, driven by the growing need for cloud computing, AI applications, e-commerce, fintech, and digital public services. Investment in digital networks alone is expected to more than double from US$2.0 billion to US$4.1 billion, creating opportunities in fibre-optic networks, submarine cables, telecommunications towers, and next-generation connectivity infrastructure.
Social infrastructure is also projected to grow, with annual investment in health and education infrastructure increasing from US$5.5 billion in 2024 to approximately US$15.2 billion by 2050. This increase will support Indonesia’s long-term human resource development agenda.
“The next phase of Indonesia’s infrastructure development will be characterised by an increasingly diverse range of sectors becoming investment focuses. While transport remains the top priority, the growing need for clean energy, digital connectivity, water availability, healthcare, and education will create investment opportunities for both the public and private sectors. Together, these sectors will serve as the foundation for Indonesia’s long-term competitiveness and economic growth,” said Agung.
Private investment and effective project execution will be determining factors. As infrastructure needs increase, the aspect of financing will become an increasingly important consideration. The report highlights that achieving Indonesia’s long-term infrastructure targets requires broader capital mobilisation beyond traditional public funding sources. Greater participation from private investors, sovereign wealth funds, institutional investors, and development finance institutions…