Jakarta, INTI - Indonesia’s growing data center investments are creating new business opportunities for clean water providers. Water demand to support data center operations is expected to increase alongside the rapid adoption of artificial intelligence (AI).
Indonesia is one of Southeast Asia’s largest digital markets. The e-Conomy SEA 2025 report recorded that approximately 80% of digital users in Indonesia use AI-powered services daily. Revenue from AI-based applications also grew by 127% year-on-year.
This growth is driving demand for greater computing capacity. Data centers have become critical infrastructure supporting AI services, cloud computing, and the broader digital economy.
However, data center expansion also presents challenges, particularly the water required for cooling systems. The issue extends beyond water availability to how supplies are treated, allocated, and distributed to ensure industrial demand does not compromise community needs.
Riana Afriadi, President Director of Perumda Air Minum Gapura Tirta Rahayu, said that water resource potential must be supported by adequate treatment and distribution infrastructure.
“No matter how significant our water resources are, without adequate infrastructure, our ability to treat and distribute water will remain limited,” Riana said.
Riana believes that the arrival of data centers and other large industrial customers should not be viewed solely as an additional burden on water utilities. Instead, industrial demand can create opportunities to strengthen both commercial operations and infrastructure.
“We do not see the presence of data centers merely as an additional demand for water. We see it as an opportunity,” she said.
According to Riana, industrial customers can generate additional revenue that can be reinvested in expanding production capacity, improving pipeline networks, upgrading facilities, and extending services to communities.
Data center water demand does not automatically reduce the supply available to households. Its impact depends on the water sources used, allocation systems, treatment capacity, and distribution networks in each region.
In Purwakarta, for example, some raw water allocated for the drinking water supply system remains underutilized. Part of this available capacity could potentially serve industrial needs while maintaining the priority of community access.
Water-Efficient Cooling Technologies Become Increasingly Important
The cooling technology used by a data center also plays a significant role in determining its water consumption. Cooling towers and evaporative cooling systems use water to dissipate heat through evaporation.
Other technologies, however, can reduce water consumption, including air-cooled chillers, economizers, closed-loop systems, and dry cooling.
As a result, water consumption cannot be assessed solely based on a data center’s capacity. Cooling systems, water sources, treatment capabilities, water reuse potential, and seasonal conditions at the project location must also be considered.
Adopting water-efficient technologies is becoming increasingly important as data center development is projected to accelerate alongside AI growth.
For investors, reliable water supplies are an essential component of regional infrastructure readiness. Areas capable of providing sustainable electricity, telecommunications connectivity, land, and water are potentially more attractive to data center developers.
However, local governments and industry players must ensure that development remains within environmental carrying capacity.
Water-use regulations, raw water availability, community requirements, cooling technologies, and water efficiency obligations must all be considered during the planning stage.
Integrating Data Centers with Renewable Energy and Sustainable Water Systems
Beyond water, energy is another critical factor in data center development. These facilities require substantial electricity to operate servers, cooling systems, and supporting equipment.
Indonesia has an opportunity to develop data center clusters integrated with renewable energy and sustainable water supply systems.
Satya Yudha, a member of Indonesia’s National Energy Council, said that combining these resources could give Indonesia a competitive advantage in attracting data center investments.
“Indonesia has room to develop an integrated combination of digital infrastructure, renewable energy, and water resources,” Satya said.
According to him, the availability of these three elements could strengthen Indonesia’s position in the competition for data center investment across Southeast Asia.
Ultimately, the influx of data center investments creates opportunities beyond the technology sector. Industries such as energy, construction, telecommunications, and clean water supply could also benefit from the resulting economic activity.
The challenge is ensuring that all these infrastructure requirements develop in a balanced and sustainable manner.
For clean water providers, large industrial customers represent an opportunity to strengthen infrastructure and expand public services, provided that water resources are managed efficiently and sustainably.
Conclusion
Indonesia’s expanding data center industry is creating new opportunities for clean water providers while increasing the importance of sustainable water management. By investing in treatment and distribution infrastructure, adopting water-efficient cooling technologies, and integrating data centers with renewable energy, Indonesia can attract digital infrastructure investment while safeguarding water access for communities.
Read more: Indonesia Accelerates Data Center Development as Economic Opportunities Grow