Observer: Indonesia holds promising value for data centre investment
Jakarta (ANTARA) - The Managing Director of the Energy Shift Institute (ESI), Putra Adhigumenta, believes Indonesia holds great promise as a destination for data centre investment through competitive incentives, reliable electricity, and a gradual energy transition.
According to Putra, the government can strengthen the attractiveness of data centre investments by designing incentives that prioritise domestic value addition, ensuring that the economic benefits are more widely felt within Indonesia.
“Indonesia is a promising country for the DC (data centre) market, but incentives must be based on the elements of fairness regarding domestic value addition and a greener transition, including in terms of energy sources,” Putra said when contacted by ANTARA in Jakarta on Tuesday.
He made these remarks in response to statements by the Minister of Energy and Mineral Resources, Bahlil Lahadalia, who invited investors to utilise Indonesia’s various islands to build data centres.
Putra urged that the provision of incentives should not be based solely on the total value of the investment, but must instead be linked to the contribution towards creating domestic value addition.
In his view, the data centre industry creates relatively limited permanent employment, approximately 15 employees for every investment worth 100 million US dollars, meaning the economic benefits need to be measured more comprehensively.
Therefore, Putra believes the government needs to ensure that every incentive provided is truly based on evidence of contribution to the national economy so that such policies remain fair and effective.
On the other hand, he noted that data centre investors have diverse needs, ranging from competitive electricity prices to the availability of clean energy to support long-term operations.
Nevertheless, Putra considers the reliability of the electricity supply to remain the primary consideration for investors; thus, PT PLN must ensure that the electrical system is capable of meeting the growing demand of data centres without disrupting services to the public or other industries.
He also encouraged the government to direct data centre development towards the gradual use of green energy, for example, through a target of 30 per cent clean energy utilisation, increasing to 50 per cent and then 70 per cent.
According to Putra, such a phased approach is more realistic than immediately mandating 100 per cent clean energy, while simultaneously providing certainty for businesses to invest.
“In this way, businesses are given a more measurable incentive, and data centres do not become a reason for the expansion of coal-fired power plants (PLTU) or an obstacle to the clean transition,” he stated.
He added that a combination of incentives linked to domestic value addition, a reliable electricity supply, and an increase in the use of clean energy will strengthen Indonesia’s position as a competitive and sustainable data centre investment destination.
Previously, the Minister of Energy and Mineral Resources, Bahlil Lahadalia, offered investors the opportunity to utilise Indonesia’s islands to build data centres.
“Ladies and gentlemen, investors should not hesitate to build data centres in Indonesia. Our territory is the largest in the Southeast Asian region, and we have many islands,” said Bahlil at the Electricity Connect 2026 event held in Tangerang, Banten, on Tuesday (22/9).
Furthermore, Bahlil noted that Indonesia possesses significant energy potential to support data centre operations, citing potential energy from solar, hydro, geothermal, wind, and other sources.
In addition to the advantages of a vast territory and abundant energy resources, Bahlith stated that electricity production costs in Indonesia are certainly much more competitive compared to other countries.
“We will provide various facilities and ease for all of you,” Bahlil told the audience at Electricity Connect 2026.
As one of the key aspects of building data centres is the certainty of electricity supply to meet their requirements, Bahlil assured that there would be no issues in fulfilling the electricity needs of data centres.