Data Centers Are Growing Fast. Now Indonesia Needs to Think About How We Finance Them.

 

Over the past few years, Indonesia’s data center industry has moved from being a relatively niche part of the technology sector into something much more strategic.

Cloud adoption is growing. Hyperscalers are expanding. AI is pushing computing requirements to a completely different level. At the same time, large Indonesian business groups and global infrastructure investors are becoming increasingly active in the sector.

All of this naturally raises one important question:

How are we going to finance the next phase of data center growth?

Data centers are extremely capital-intensive.

Building the facility itself is only one part of the equation. You need land, power infrastructure, cooling systems, connectivity, backup systems, security, and increasingly sophisticated equipment to support high-density computing.

Once we start talking about hyperscale and AI infrastructure, the numbers become much bigger.

A 10 or 20 MW project is already capital intensive. But the industry is now discussing campuses of hundreds of megawatts. Eventually, some markets will be thinking in gigawatts.

At that scale, financing becomes an ecosystem issue.

Indonesian banks are already playing a big role

The good news is that Indonesian banks are not starting from zero.

We have already seen several large financing transactions involving data center operators in Indonesia. Some facilities are now reaching trillions of rupiah, while syndicated financing involving international and domestic banks has also become increasingly common.

So I don't think the question today is:

“Are banks willing to finance data centers?”

They clearly are.

The more interesting question is whether the banking system alone should finance the enormous amount of infrastructure that will be required over the next decade.

My view is that it probably shouldn't.

Banks will continue to play a very important role, particularly in development financing, construction financing, term loans and revolving facilities.

But as projects become larger, Indonesia will eventually need to tap a much broader pool of capital.

That includes institutional investors, infrastructure funds, insurance companies, pension funds and, importantly, the capital markets.

The offtaker matters — a lot

One interesting aspect of data center financing is that lenders are not simply financing a building full of servers.

They are really underwriting the predictability of the cash flow behind that infrastructure.

That makes the customer — or the offtaker — extremely important.

Imagine two identical data centers.

One is being developed speculatively with no committed customer.

The other already has a long-term contract with a global hyperscaler or a highly creditworthy enterprise customer.

From a lender's perspective, these are two very different risk profiles.

A strong offtaker can significantly improve the bankability of a project because it gives lenders better visibility over future revenue.

Banks will naturally look at things such as contracted capacity, contract tenor, customer concentration, termination provisions and the creditworthiness of the customer.

But offtake is only one piece of the puzzle.

For me, there are three things that increasingly determine the financing attractiveness of a data center:

Power certainty. Customer certainty. Execution certainty.

Do you really have access to the power you need?

Do you have customers ready to take the capacity?

And can you actually deliver the facility on time and operate it reliably?

The stronger the answers to those three questions, the easier it becomes to build a compelling financing story.

Malaysia is already showing what could come next

There is an interesting example just next door.

In Malaysia, Sime Darby Property has established a multi-billion-ringgit Sukuk Wakalah programme connected to the development of hyperscale data center infrastructure.

What makes the transaction particularly interesting is that it brings together digital infrastructure and sustainable capital-market financing.

The project also benefits from a long-term lease arrangement with a global technology company.

Again, we come back to the importance of the offtaker.

Once investors can see a long-duration asset, a credible operator and predictable contractual cash flows, the data center starts looking less like a speculative technology project and more like an institutional infrastructure asset.

That changes the financing conversation completely.

Could Indonesia do something similar?

I think so.

So far, Indonesia's large data center financing transactions have largely been concentrated in bank loans, syndicated facilities and green loans.

We already have listed data center companies in the equity market.

But what we haven't really seen yet — at least not at meaningful scale — is a dedicated bond or sukuk issuance specifically structured to finance a major data center development in the way we are beginning to see elsewhere in the region.

I believe that could be the next evolution.

Indonesia already has regulatory frameworks for green bonds, green sukuk and other sustainability-related instruments.

The challenge is creating projects that institutional investors are comfortable investing in.

And that probably means the first transactions will come from assets that are already relatively mature.

Build with banks, refinance with the capital markets

One model I find particularly interesting is relatively straightforward.

Banks finance the development and construction phase.

Once the data center is operational, substantially contracted and generating predictable cash flow, part of the financing can be refinanced through bonds, sukuk or other capital-market instruments.

This does two things.

First, it gives long-term investors access to a new category of digital infrastructure assets.

Second, it allows banks to recycle their capital.

Instead of having their balance sheets tied up for many years in mature assets, banks can redeploy some of that capital into financing the next wave of data center development.

In a rapidly growing industry, this kind of capital recycling can become very powerful.

Green financing could also be a natural fit — with one important caveat

Data centers and green financing are increasingly discussed together, but we should be careful here.

A data center is not automatically “green” simply because it is part of the digital economy.

These facilities consume significant amounts of electricity.

If operators want to access green bonds or green sukuk, they will need to demonstrate genuine environmental credentials.

That can include energy efficiency, renewable energy procurement, cooling efficiency, water management and other measurable sustainability indicators.

This is especially important as AI increases rack density and electricity consumption.

The industry should therefore avoid treating sustainability merely as a financing label.

It needs to be embedded in how the infrastructure is designed and operated.

AI will make the financing challenge even bigger

There is also another layer to this discussion.

When we talk about AI infrastructure, we should distinguish between the data center infrastructure and the compute infrastructure inside it.

Buildings, electrical infrastructure, cooling systems and connectivity assets typically have relatively long economic lives.

GPUs and other computing hardware operate on a much shorter technology cycle.

Trying to finance both with exactly the same structure may not always make sense.

Over time, I expect the financing market to become more sophisticated, with different pools of capital financing different layers of the AI infrastructure stack.

Long-term infrastructure capital may finance the physical facility.

Other forms of financing may be more suitable for computing equipment.

That segmentation is already developing in more mature markets, and Indonesia will likely move in the same direction.

Indonesia doesn't need to copy the US

There is a lot of discussion about whether financing structures used for AI infrastructure in the United States can be replicated in Indonesia.

My answer would be:

Yes, we can learn from them — but we don't need to copy them.

Indonesia has its own banking system, capital markets, institutional investor base, regulatory framework and risk profile.

What matters is the principle.

A trillion-dollar global infrastructure transition cannot be funded from a single pool of money.

If Indonesia seriously wants to become one of Asia's major digital infrastructure hubs, we will need to mobilize capital from many different sources.

Banks.

Equity investors.

Infrastructure funds.

Insurance companies.

Pension funds.

Bonds.

Sukuk.

Green financing.

Possibly new financing structures that we haven't widely used yet.

That is the financial ecosystem we need to build alongside the physical data center ecosystem.

The next bottleneck may not only be power

For years, much of the data center conversation in Indonesia has focused on land, electricity, connectivity, regulation and talent.

Those remain critical.

But as the industry scales, capital itself could become another constraint.

Indonesia may have the demand.

We may have the land.

We may have the power resources.

We may have investors that want to build.

But if the financing ecosystem cannot scale at the same speed, infrastructure development will eventually slow down.

That is why I believe financing needs to become a much bigger part of the data center conversation.

The next stage of Indonesia's digital infrastructure story will not just be about how many megawatts we can build.

It will also be about how intelligently we finance those megawatts.

And if we get that part right, Indonesia will be in a much stronger position not only to serve its domestic digital economy, but also to become one of the most important digital infrastructure markets in the region.

1 Decade of IDPRO!

Ten years ago, what began as a simple conversation among friends and fellow industry leaders gradually became a shared ambition.

The idea was clear: Indonesia deserved digital infrastructure that could support its economic growth, strengthen its national resilience, and compete at a world-class level.

That conversation evolved into a vision. The vision inspired collaboration. And from that collaboration emerged a movement that is now known as IDPRO—the Indonesia Data Center Provider Organization.

Today, IDPRO’s 10th anniversary is more than a celebration of organizational longevity. It is a reflection on a decade of trust, partnership, advocacy, and collective progress in strengthening the foundation of Indonesia’s digital future.

From a Shared Vision to a National Movement

Great transformations rarely begin with perfect plans or unlimited resources. They begin when a group of people chooses to believe in a future that has not yet been built.

Walking this journey together with Mr. Toto Sugiri, Mr. Richard Kartawidjaja, and Mr. Michael Abimanyu has been one of the greatest privileges of this professional chapter.

Together, we did not simply establish an industry organization. We nurtured a community united by one conviction: Indonesia must have a digital infrastructure ecosystem that is secure, scalable, reliable, and capable of supporting generations of innovation.

At the beginning, IDPRO was driven by a small group of visionary members who understood that the growth of Indonesia’s digital economy could not depend on isolated efforts. Progress required a platform where industry players, technology companies, academics, regulators, utilities, media organizations, and public institutions could work toward a common objective.

Over the past decade, that vision has grown into a broad and increasingly interconnected ecosystem. IDPRO’s anniversary presentation describes this journey as a transformation from a shared vision into a multi-gigawatt digital infrastructure ecosystem.

This growth reflects more than an increase in infrastructure capacity. It represents the growing maturity of Indonesia’s digital economy and the collective determination to ensure that the country is not merely a consumer of global technology, but an active builder of its own digital future.

Data Centers as the Heart of the Digital Economy

To many people, a data center may appear to be little more than a secure building filled with servers, cables, cooling systems, and technical equipment.

In reality, its role is far more significant.

Data centers power the services that have become essential to modern life. Banking transactions, digital payments, healthcare platforms, e-learning systems, government services, cloud computing, e-commerce, artificial intelligence, social media, and smart-city applications all depend on reliable digital infrastructure operating behind the scenes.

Every time a business accesses a cloud platform, a citizen uses a government application, a student attends an online class, or a customer completes a digital transaction, a complex infrastructure ecosystem is working continuously to process, protect, and deliver that information.

For this reason, data centers are no longer simply buildings that store servers.

They are places where public trust is protected, where business continuity is maintained, and where the future of the nation is being built.

Their reliability determines whether essential services remain available. Their security affects the protection of national and commercial data. Their capacity influences how quickly innovation can grow. Their energy efficiency determines whether digital expansion can remain environmentally responsible.

Most importantly, their governance plays a critical role in strengthening Indonesia’s digital sovereignty.

Collaboration Over Competition

No single company can build Indonesia’s digital future alone.

Data center operators require stable and sufficient electricity. Cloud providers depend on resilient connectivity. Government institutions need secure infrastructure to deliver public services. Technology partners must continue advancing efficiency and performance. Universities need direct insight into industry requirements so they can prepare future talent. Regulators need open and constructive dialogue to develop policies that protect national interests while encouraging innovation.

IDPRO exists at the intersection of these needs.

It serves as a bridge between industry and government, between technology and policy, and between infrastructure development and human-capital readiness.

The organization brings together data center providers, telecommunications companies, cloud and digital-platform operators, technology partners, academics, government institutions, regulators, and other stakeholders within Indonesia’s digital ecosystem.

This collaborative spirit has always been one of IDPRO’s greatest strengths.

Competition can drive companies to improve. However, collaboration allows an entire industry to progress.

By creating a trusted platform for discussion, IDPRO has helped transform individual industry concerns into shared priorities. It has encouraged stakeholders to move beyond short-term interests and focus on the long-term resilience of Indonesia’s digital economy.

Gratitude to the Ecosystem Behind the Journey

A ten-year milestone is never achieved by founders or leaders alone.

It is built through countless conversations, difficult negotiations, shared challenges, policy discussions, technical breakthroughs, partnerships, and moments of mutual trust.

To every industry player who believed that collaboration could create greater impact than competition alone—thank you.

To the technology partners who continued to push the boundaries of innovation, performance, security, and efficiency—thank you.

To the academics and educational institutions that contributed research, knowledge, and future talent—thank you.

To the media organizations that helped amplify the importance of digital infrastructure and bring industry discussions into the public sphere—thank you.

To PLN, whose commitment and support have been fundamental to the growth of Indonesia’s digital infrastructure—thank you.

To the government institutions and regulators that continued to open pathways for progress through thoughtful policies and constructive engagement—thank you.

Every contribution has become another brick in the foundation we have built together.

Every challenge has strengthened the ecosystem.

Every milestone has proven that meaningful progress becomes possible when trust is placed at the center of collaboration.

Four Pillars for Sustainable Progress

As IDPRO enters its next chapter, the organization’s role extends far beyond representing the interests of the data center industry.

Its future contribution can be understood through four interconnected priorities: standards, sustainability, talent, and sovereignty.

Advancing National Standards

World-class digital infrastructure requires more than investment in buildings and technology. It requires consistent operational standards that protect reliability, security, interoperability, and public confidence.

IDPRO has contributed to discussions surrounding national data center standards, including SNI 8799, which supports stronger operational practices and provides an important reference for Indonesia’s digital infrastructure ecosystem.

Standards create a shared benchmark. They help ensure that the industry does not grow through capacity alone, but also through quality, accountability, and resilience.

As public services and national systems become increasingly digital, dependable standards will become even more essential.

Powering Sustainable Infrastructure

The digital economy will continue to expand, but that growth cannot come at the expense of the environment.

Data centers require substantial energy to operate computing equipment, cooling systems, security infrastructure, and continuous backup facilities. As demand for cloud services, artificial intelligence, and digital platforms increases, the industry must develop more efficient and responsible ways to power that growth.

The next generation of data centers must incorporate renewable-energy strategies, more efficient cooling technologies, improved power usage, and closer collaboration with the energy sector.

Initiatives involving renewable-energy certificates, power purchase agreements, advanced liquid cooling, and other efficiency solutions will become increasingly relevant as the industry prepares for higher computing density.

Sustainability is not an optional addition to digital development. It is a requirement for long-term competitiveness.

Bridging the Talent Gap

Digital transformation is ultimately about people, not only technology.

Advanced infrastructure cannot operate without engineers, technicians, cybersecurity professionals, energy specialists, data center managers, and leaders who understand both technology and business.

Indonesia must therefore invest in a stronger pipeline of digital-infrastructure talent.

Collaboration between industry and educational institutions can help align academic curricula with real-world requirements. Research partnerships can advance knowledge in electrical systems, thermal efficiency, cybersecurity, and sustainable infrastructure. Professional training and certification can help improve competency across the industry.

By connecting universities with industry, Indonesia can prepare not only job seekers, but also innovators, researchers, builders, and future leaders.

Strengthening Digital Sovereignty

Digital sovereignty is not simply about where data is stored.

It is about a nation’s ability to protect its digital assets, maintain operational continuity, develop domestic capabilities, and make strategic decisions concerning its own digital ecosystem.

As digital infrastructure becomes more deeply connected to financial services, healthcare, education, public administration, transportation, and national security, resilience becomes a matter of national importance.

Industry and government must therefore continue working together to build infrastructure that is secure, sustainable, and prepared for future disruption.

IDPRO’s role as a platform for policy recommendations, infrastructure advocacy, standards development, and industry representation will remain critical in strengthening Indonesia’s long-term digital resilience.

Preparing for the Era of Artificial Intelligence

The next decade will bring challenges that are significantly different from those of the previous ten years.

Artificial intelligence is already transforming the requirements of data center infrastructure. Traditional computing environments were designed for lower-density deployments. AI workloads demand far greater processing power, higher energy density, advanced network capacity, and more sophisticated cooling systems.

The rise of high-density AI infrastructure will reshape how data centers are designed, built, and operated.

Cooling systems may increasingly shift from conventional air-based methods toward direct-to-chip liquid cooling and immersion technologies. Buildings will need to accommodate heavier structural loads. Energy planning must support larger and more dynamic computing requirements.

This is not simply a technical upgrade.

It is a fundamental shift in infrastructure strategy.

Indonesia must prepare early if it wants to become a competitive location for AI development, cloud expansion, and advanced digital services. That preparation will require close cooperation among data center providers, technology companies, energy suppliers, investors, government institutions, and educational partners.

Bringing Computing Closer to the People

The future of digital infrastructure will not depend entirely on large centralized data centers.

Applications such as autonomous systems, smart manufacturing, connected healthcare, 5G, the Internet of Things, and real-time digital services require extremely low latency. Data must be processed closer to the user, device, or operational location.

This is where edge computing becomes increasingly important.

The future ecosystem will connect large hyperscale facilities with regional data centers, tower-based infrastructure, edge facilities, and smart devices. Together, they will create a distributed computing environment capable of supporting both massive centralized processing and hyperlocal service delivery.

For a country as geographically diverse as Indonesia, this model carries strategic importance.

A stronger edge ecosystem can help extend digital services beyond major metropolitan areas, improve service performance, and create broader opportunities for regional participation in the digital economy.

The Next Ten Years

The first decade of IDPRO was about laying the foundation.

The next decade must be about building a future worthy of that foundation.

That future requires infrastructure that can scale with demand, remain operational under pressure, reduce its environmental impact, support advanced technologies, and strengthen national sovereignty.

It also requires an ecosystem built on trust.

The challenges ahead—AI readiness, renewable energy, cybersecurity, talent development, regulatory coordination, and nationwide connectivity—cannot be solved by a single organization or company.

They will be addressed by an ecosystem that understands how to move together.

The next decade will not be won by the largest player alone. It will be shaped by the quality of collaboration among government, industry, technology partners, energy providers, academics, media, and society.

More Than an Anniversary

Today, as IDPRO celebrates its 10th anniversary, we are not only looking back at what has been achieved.

We are making a promise for the future.

Infrastructure is never built for today alone. It is built for businesses that have not yet been established, technologies that have not yet been invented, services that have not yet been imagined, and generations that will inherit the systems we create.

Our commitment remains stronger than ever: to help build Indonesia’s digital infrastructure so that it is scalable, reliable, secure, and sustainable.

Infrastructure that empowers innovation.

Infrastructure that strengthens digital sovereignty.

Infrastructure that creates opportunities for every Indonesian.

To everyone who has been part of this remarkable journey, thank you for believing in IDPRO.

Thank you for helping turn a conversation into a vision, a vision into a community, and a community into a movement.

The foundation has been laid.

Now, together, we begin building the next chapter.

Together, we continue building the digital heartbeat of Indonesia.

Happy 10th Anniversary, IDPRO

The Sovereignty Synthesis: Strategic Collaboration and Indonesia’s Path to the ASEAN Digital Hub

 1. Contextualizing the Global Shift: Reflections from the Moscow "Open Dialogue"

In April 2026, the Russia National Center hosted the "Open Dialogue" forum, a milestone gathering that emerged as a vibrant tapestry of global ambition. This was not merely a conference of isolated agendas; it was a theater of strategic alignment where representatives from over one hundred countries met to define a new model for global growth. The atmosphere was charged with the understanding that the era of zero-sum geopolitics is fading, replaced by a "New Platform for Global Growth" rooted in stable, shared development.

The strategic tone was established by President Vladimir Putin, who delivered a resolute warning: the global challenges of our age require an unconditional response, and any attempt to solve systemic problems "at someone else’s expense" is a dangerous illusion. This vision was given analytical depth by Maxim Oreshkin, who presented the "megatrends" shaping the mid-century landscape. To navigate these shifts, Oreshkin argued that nations must hold a "compass" of collaboration, moving beyond traditional power blocs toward a multipolar, interconnected reality. As a jury member overseeing technology investment, I spent the forum reviewing 24 essays from international thinkers—a window into diverse cultural futures that consistently prioritized the evolution of national sovereignty. These dialogues, enriched by peers such as global strategist Dr. Parag Khanna and digital researcher Dr. Rais Hussin, signaled a profound shift: sovereignty is no longer a wall to keep the world out, but a foundation upon which to build global bridges.

2. The Six Pillars of Modern Digital Sovereignty

In the current epoch, sovereignty has transcended physical borders to reside within "invisible architectures." These frameworks are the lifeblood of national resilience and the primary engine of economic progress. For Indonesia to lead, we must master these six dimensions:

• Data Sovereignty: Asserting control over the digital economy’s lifeblood by treating data mobility as a vital component of global communication rather than a resource for external extraction.
  • So What? This ensures that the economic value of Indonesian information remains within the domestic ecosystem, safeguarding against digital colonialism.
• Digital Infrastructure Sovereignty: Building independent technological backbones. This requires institutions like IDPRO (Indonesian Data Center Provider Association) to serve as the architects of transformation, localizing cloud capabilities and secure telecommunications.
  • So What? Independent infrastructure ensures that a nation’s connectivity remains operational and secure regardless of external geopolitical pressures.
• Regulation Sovereignty: Aligning national values and traditions with global frameworks to protect domestic innovation, particularly in sensitive areas like migration flows and digital currencies.
  • So What? This allows Indonesia to participate in international trade without sacrificing its unique cultural integrity or legal autonomy.
• Energy Sovereignty: Securing accessible and sustainable power to fuel the massive demands of digital expansion.
  • So What? Reliable energy is the prerequisite for any "Industrial Breakthrough" and protects the digital economy from external supply shocks.
• Technology Sovereignty: Advancing indigenous innovation in Artificial Intelligence, water resource management, and food safety.
  • So What? Indigenous technological depth prevents "lock-in" to foreign platforms and ensures solutions are tailored to local environmental and social challenges.
• Talent Sovereignty: Cultivating human capital through Sergey Ivanov’s "Human + Biotech" platform models and transformed education systems.
  • So What? By nurturing a self-sustaining pipeline of skilled professionals, Indonesia becomes a creator of future labor markets rather than a mere consumer.

True sovereignty does not flourish in isolation; it matures through strategic partnerships that reinforce mutual independence rather than one-way dependency.

3. The Global South Connection: Collaboration as a Multiplier

Indonesia’s strategic priority must be the cultivation of alliances with the nations of the Global South and East. These nations are navigating parallel journeys—balancing the hunger for digital transformation with the necessity of maintaining political autonomy. In this context, collaboration acts as a multiplier for Indonesia's national interests, addressing shared vulnerabilities like natural disasters and water resource management.

To move beyond the obsolete model of one-way dependency, Indonesia should lead a "shared journey" model characterized by the following strategic actions:

• Co-developing regional data ecosystems that prioritize local data mobility over foreign extraction.
• Interconnecting digital infrastructure across ASEAN to create a seamless, resilient regional network.
• Aligning regulatory frameworks to facilitate digital trade while protecting domestic "smart city" innovations.
• Advancing joint energy strategies that focus on circular economy principles and sustainable resource management.
• Encouraging technology transfer through joint ventures in industrial breakthroughs rather than perpetual licensing fees.
• Creating cross-border talent pipelines to address the global "digital divide" through shared expertise.

By positioning itself as a central node in this South-South-East alignment, Indonesia transitions from a peripheral actor to a primary architect of the new global landscape.

4. Strategic Vision: Indonesia as the ASEAN Digital Hub (2026–2031)

The five-year horizon from 2026 to 2031 offers a critical window for Indonesia to emerge as the primary ASEAN digital hub—the regional epicenter where world-class infrastructure, talent, and policy converge. This future must be built brick by brick, with IDPRO and government stakeholders acting as the master planners of our digital estate.

To achieve this vision, we must distill our efforts into three critical takeaways:

1. Prioritize Human Capital and the "Happiness Index": We must move beyond GDP as the sole metric, focusing on human well-being and the transformation of education to ensure our youth are the primary beneficiaries of the "Human + Biotech" era.
2. Commit to Technological Autonomy in the Platform Economy: Indonesia must develop indigenous breakthroughs in industrial technology and e-commerce platforms to secure our position in the global supply chain.
3. Lead the Integration of Regional Connectivity: By championing ASEAN-wide digital currencies and logistics routes, Indonesia can cement its role as the indispensable gatekeeper of regional commerce.

5. The Human Factor: Building Bridges for Tomorrow

Ultimately, the insights gained from the Moscow "Open Dialogue" remind us that innovation is a human endeavor. Beyond the formal sessions and policy briefs, the most enduring achievements are the "bridges of understanding" built between diverse cultures and traditions. Innovation is forged in dialogue and sharpened by the friction of different perspectives; it is through these human exchanges that we solve the "unconditional and global" challenges mentioned by President Putin.

As we look toward 2031, Indonesia’s goal is not merely technological supremacy, but the enhancement of the "Happiness Index" and the well-being of its citizens. In a world often fragmented by competition, Indonesia must lead with clarity of purpose. By synthesizing sovereignty with strategic collaboration, we will shape a digital future that is not only balanced and prosperous but one that reflects the enduring values of our people. The journey toward a sovereign, collaborative future continues now.