Jakarta, INTI - Indonesia’s data center industry is expected to maintain strong growth momentum as demand for digital services and artificial intelligence (AI) continues to accelerate. The Indonesian Data Center Providers Association (IDPRO) projects the country’s total operational capacity to approach 600 megawatts (MW) by the end of 2026.
IDPRO Chairman Hendra Suryakusuma said Indonesia’s operational data center capacity had reached approximately 520 MW as of June 2026. IDPRO members currently represent more than 80% of the nation’s total data center capacity.
He noted that national capacity is projected to increase to nearly 600 MW by year-end, driven by several facilities currently entering the construction, energization, and commissioning phases.
"However, the actual realization will depend on power availability, construction completion, and customer demand for the new capacity," Hendra told Kontan on Tuesday, August 4, 2026.
AI and Cloud Adoption Fuel Industry Expansion
According to Hendra, the industry's growth outlook through the end of 2026 will be supported by the rapid adoption of cloud services and artificial intelligence technologies.
The continued digitalization of government services, banking, e-commerce, telecommunications, and rising enterprise demand for stronger cybersecurity and resilient IT infrastructure are also expected to drive sustained expansion.
Hendra emphasized the importance of distinguishing between operational capacity, projects under construction, and announced or planned developments when evaluating industry growth.
"IDPRO prefers to use operational capacity as the most realistic indicator of the industry's actual progress," he said.
Looking further ahead, IDPRO projects Indonesia's data center capacity could reach approximately 1.41 gigawatts (GW) by 2029, highlighting the country's significant long-term growth potential.
"I personally believe we could reach that level even sooner, considering how rapidly the data center industry has expanded over the past two years," Hendra added.
He stressed, however, that achieving this growth will require supportive government policies, sufficient energy supply, robust connectivity, and sustained investment.
Power Supply and Green Infrastructure Remain Key Challenges
Despite its positive outlook, Indonesia's data center industry continues to face several structural challenges.
Among the most pressing are the availability of large-scale electricity supply, certainty in grid connection timelines, access to renewable energy, complex licensing procedures involving multiple government agencies, and a shortage of skilled professionals.
Additional challenges include long procurement lead times for electrical and cooling equipment, limited land and water resources, interregional connectivity, and minimizing environmental impacts.
Hendra also highlighted the obstacles to expanding green data centers in Indonesia, noting that direct access to renewable energy and simpler investment mechanisms remain key areas requiring improvement.
"I am confident these challenges can be addressed with continued support from regulators," he concluded.
Conclusion
Indonesia's data center industry is poised for continued expansion, driven by the rapid growth of AI, cloud computing, and digital transformation across multiple sectors. While capacity is expected to approach 600 MW by the end of 2026, unlocking the industry's full potential will depend on reliable energy infrastructure, streamlined regulations, skilled talent, and broader access to renewable energy.
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