Jakarta, INTI - Indonesia has an opportunity to become a major data center hub in Southeast Asia. However, this ambition must be balanced with sufficient energy and clean water supplies to ensure that digital infrastructure development does not compromise communities’ basic needs.
Agus Harimurti Yudhoyono (AHY), Coordinating Minister for Infrastructure and Regional Development, warned that data center construction requires substantial amounts of electricity and clean water.
“The principle is to encourage data center development without, I repeat, without, harming or disrupting the environmental balance of the surrounding area,” AHY emphasized on Monday, October 12, 2026, on the sidelines of the Digital Infrastructure Summit 2026 in Jakarta.
AHY noted that the growing adoption of the digital economy, including e-commerce, continues to drive demand for data centers across various regions.
At the same time, data centers require significant electricity and clean water resources. AHY stressed that these requirements must be carefully assessed before construction begins.
He also emphasized that communities have the right to live peacefully, comfortably, and healthily without having their basic needs compromised.
AHY called on relevant stakeholders to ensure that every data center project complies with established standards and requirements, particularly those concerning environmental impacts.
“Water, once again, is critically important, and it is not just for data centers. We also need water for our communities, our crops, our livestock, and to protect our environment,” he said.
He further highlighted the need to prevent water pollution and avoid improper or inefficient water use. According to AHY, water security is becoming an increasingly important issue alongside food and energy security.
“This is a global issue, and in the future, it could potentially become a source of conflict between countries,” AHY said.
Indonesia Seeks a Larger Role in Southeast Asia’s Data Center Industry
The ambition for Indonesia to become a major player in Southeast Asia’s data center industry was previously expressed by Erick Thohir during his tenure as Minister of State-Owned Enterprises from 2019 to 2026.
In September 2023, Erick said the government was encouraging investment in the data center sector to capitalize on Indonesia’s digital economy potential, which was projected to become one of the largest in Southeast Asia.
“We are focusing on four areas that we are actively promoting. For example, Telkom is investing heavily to strengthen our data center infrastructure. We are working to ensure that Indonesia becomes one of the major data center players in Southeast Asia,” Erick said on the sidelines of the ASEAN-Indo Pacific Forum (AIPF) in Jakarta on Tuesday, September 5, 2023.
Erick also underscored the importance of cooperation between state-owned enterprises and regional partners to strengthen Indonesia’s domestic data center industry. He expressed hope that Indonesia would not merely serve as a market but would also become competitive on the global stage.
Data Center Development Requires Integrated Spatial Planning
AHY stressed that data center site selection should be incorporated into regional spatial planning involving both central and local governments.
Industrial estates could serve as potential locations for data center development because their existing ecosystems can be prepared to support the infrastructure and operational requirements of these facilities.
He also highlighted the need for coordination across ministries. While the Coordinating Ministry for Infrastructure and Regional Development does not oversee the Ministry of Communication and Digital Affairs (Komdigi), which falls under the Coordinating Ministry for Political and Security Affairs, cross-sector collaboration remains essential.
Physical infrastructure plays a crucial role in supporting digital infrastructure development. This includes internet connectivity, cellular networks, base transceiver station (BTS) towers, broadband networks, and submarine cables.
Digital economic activities also depend on supporting infrastructure such as roads, bridges, ports, and airports.
Regarding water availability, AHY noted that Indonesia has dams and reservoirs capable of supporting both household and industrial demand, including the digital economy sector. However, their use must continue to account for the needs of communities and the environment.
640 MW AI Data Center Project in Jatiluhur Temporarily Suspended
Concerns over data centers’ energy and water requirements have intensified following the temporary suspension of BDx’s artificial intelligence (AI) data center project in Jatiluhur, Purwakarta, West Java.
The project has a planned capacity of 640 megawatts (MW) and was temporarily halted by West Java Governor Dedi Mulyadi because its environmental impact assessment (AMDAL) and Building Approval (PBG) had not yet been completed.
The case highlights the importance of ensuring that large-scale digital infrastructure projects meet environmental and regulatory requirements while balancing the growing demand for computing capacity with the availability of essential resources.
Conclusion
Indonesia’s ambition to become a leading data center hub in Southeast Asia must be supported by sustainable energy and water management. AHY emphasized the importance of balancing digital infrastructure expansion with environmental protection and community needs, particularly as the temporary suspension of a 640 MW AI data center project in Jatiluhur highlights the importance of regulatory compliance.
Read more: Data Centers and AI in Indonesia Drive Investment Opportunities Amid Sustainability Challenges