Jakarta, INTI - Indonesia is projected to become one of the world's largest infrastructure markets over the next 25 years, driven by population growth, rapid urbanization, and technological transformation. As demand for modern infrastructure continues to rise, the country is expected to climb from the world's ninth-largest infrastructure market today to fourth place globally by 2050.
Agung Wiryawan, Partner and Infrastructure Leader at PwC Indonesia, said infrastructure investment over the next two decades is forecast to nearly double compared with the previous 20-year period.
According to Agung, the surge will be fueled not only by the need to expand physical infrastructure but also by fundamental shifts in infrastructure requirements brought about by digital technologies, artificial intelligence (AI), climate change, and accelerating urbanization.
"These three factors will be the primary drivers shaping the future of infrastructure development. Digitalization and AI are not only transforming how people live and work, but also influencing the design and demand for future infrastructure," Agung said during the presentation of the Indonesia Infrastructure Outlook 2025–2050 at PwC's Jakarta office on Thursday, June 25, 2026.
Climate change and the global push for energy resilience are also accelerating investment in cleaner energy systems and more sustainable, resilient infrastructure. At the same time, continued population growth and urban expansion are creating significant demand for transportation networks, electricity, water supply, and other essential public services.
"Urbanization is fundamentally an infrastructure event. As cities grow, they require greater connectivity, transportation systems, electricity, water, and a wide range of supporting services," he explained.
In Indonesia, annual infrastructure spending is projected to increase to approximately US$29 billion by 2050. This growth is expected to elevate the country from ninth to fourth place among the world's largest infrastructure markets, while making Indonesia the third-largest infrastructure market in the Asia-Pacific region.
Transport and Energy to Remain Key Investment Priorities
Agung noted that transportation and energy will continue to attract the largest share of infrastructure investment through 2050. Globally, these two sectors account for nearly half of total infrastructure investment demand.
"Roads, bridges, railways, renewable energy projects, electricity transmission, and distribution networks will remain the primary focus of infrastructure investment," he said.
Data Centers Emerging as a High-Growth Sector
Beyond transportation and energy, Agung identified data centers as one of the fastest-growing infrastructure segments, driven by the rapid expansion of the digital economy and increasing adoption of AI-powered technologies.
He believes Indonesia has significant potential to expand its data center industry, as the country's current capacity remains well below that of neighboring markets. Indonesia currently has an estimated data center capacity of around 456 megawatts, compared with Malaysia and Singapore, each of which has already surpassed 1,000 megawatts.
"With a population of more than 280 million, Indonesia still has tremendous room for data center development," Agung said.
He added that water infrastructure and social infrastructure, including healthcare and education, will also require substantial investment in the coming decades. Improving the quality and accessibility of these essential public services will become increasingly important as Indonesia's economy and population continue to grow.
Conclusion
Indonesia is on track to become one of the world's leading infrastructure markets, supported by rapid urbanization, AI adoption, and the transition toward cleaner energy. As investment expands across transportation, energy, data centers, and public infrastructure, the country is well positioned to strengthen its economic competitiveness and drive sustainable long-term growth.
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