Kupang and Bitung Could Become Indonesia’s New Data Centre Hubs
Jakarta, CNBC Indonesia — The government is encouraging the development of private data centres in eastern Indonesia to expand investment in digital infrastructure, which has so far been concentrated in the west.
The Ministry of Communication and Digital Affairs is preparing plans covering locations, energy supply and connectivity, as well as simpler permitting, to support this expansion.
Wayan Toni Supriyanto, the ministry’s Director General of Digital Infrastructure, said that a more even distribution of data centres should take account of market potential, resource readiness, energy availability, and support from national and international networks.
“We need to prioritise certain areas, taking into account the needs of government, industry, education and public services. Energy supply and the suitability of locations are also important,” Wayan said in a written statement, cited on Friday (23 October 2026).
According to Wayan, data centre development cannot rely solely on investment and physical construction. The government must ensure that each location has an adequate support ecosystem so that data centres can operate reliably and meet users’ needs.
One measure being prepared is the drafting of regulations on submarine cables and data centres. Wayan said draft presidential regulations covering both areas had been prepared and were entering the public consultation stage.
The government is also seeking input from industry, government agencies and private companies to refine the policies.
“To encourage data centre development in eastern Indonesia, we are also providing backup connectivity to national and international connectivity hubs. This will ensure that data centres outside Java and Batam do not become isolated facilities,” he said.
Backup connectivity is an important part of building a resilient data centre network. With alternative routes in place, digital services in different regions are expected to retain reliable connections and avoid reliance on a single network route.
In addition to connectivity, the government needs to coordinate readiness in electricity supply, substations, water availability for cooling systems, and disaster risk mitigation. Simplifying permits is also a priority to make digital infrastructure development more efficient.
Wayan stressed that investment in data centres should be distributed gradually, taking into account market developments and the readiness of each region’s ecosystem. Several areas outside Java, including Sulawesi and Kupang, could be considered for development based on their potential and market needs.
“Coordination between the central government, regional governments, PLN, network operators, land agencies and investors is essential. This collaboration is important to provide certainty about land availability and costs,” Wayan said.
Coordinating Minister Airlangga previously named Bitung as a possible location for a data centre hub outside Java.
Wayan emphasised that developing data centres to support artificial intelligence (AI) requires comprehensive infrastructure readiness. Reliable electricity supply, sufficient power capacity, water availability and high-capacity connectivity are essential to support energy-intensive AI workloads.
The government is promoting stronger internet networks and electricity supplies, as well as the involvement of local contractors, to support the construction of data centres and AI factories.
“We need high-capacity connectivity to support AI. We must also ensure there are no further delays or capacity shortfalls in backbone, backhaul or access networks,” Wayan said.
The initiative is expected to expand data centre investment in eastern Indonesia and support AI development through 2030.