Indonesia’s Strategic Plan for Data Center Industry Development (2025-2030)

Turning Indonesia into Southeast Asia’s Leading Data Center Hub

Introduction: Why This Matters

Indonesia is on the fast track to becoming a digital powerhouse. With a booming internet economy, skyrocketing cloud adoption, and increasing blockchain and AI integration, our nation needs world-class data center infrastructure—secure, efficient, and future-proof.

However, we face serious challenges: high electricity costs, a lack of skilled IT professionals, and outdated regulations that put us behind regional competitors like Malaysia and Thailand. So, what’s the game plan to turn things around?

This blog dives deep into Indonesia’s strategic roadmap for the data center industry from 2025 to 2030, covering everything from investment incentives to green energy initiatives.

1. Indonesia’s Digital Transformation: The Opportunities & Challenges

Internet Users Are Growing Rapidly

💡 2013: 71.19 million users
💡 2024: 221.56 million users
🔥 211.22% growth in just a decade! (Source: Kominfo)

More users mean a surge in data traffic, cloud computing needs, and demand for high-speed connectivity. Without a strong data center industry, Indonesia risks becoming just a consumer of digital services rather than a creator.

Internet Traffic Is Exploding

🚀 Video streaming (YouTube, Netflix, Spotify) dominates bandwidth
🚀 E-commerce & fintech are processing massive transactions daily
🚀 AI & machine learning require high-scale data processing

Indonesia’s internet traffic has already hit 14 Tbps—and it’s only going up. Our infrastructure must keep up!

Blockchain & Crypto Adoption Is Booming

📌 16.7 million Indonesians are crypto investors (2023)—more than stock investors on the IDX!
📌 Blockchain tech is widely used in fintech and smart contracts
📌 Data security is now a top priority for digital transactions

With these trends, Indonesia needs a robust data center ecosystem to store and secure blockchain-based digital assets.

2. The Current State of Indonesia’s Data Center Industry

📊 Total capacity: 514 MW (Source: FutureCIO.Tech)
📊 Projected economic contribution: USD 360 billion by 2030 (Tribunnews.com)
📊 Cloud adoption growth: Over 30% per year

Key Challenges Holding Us Back

❌ High Electricity Costs – Our rates are higher than Malaysia and Thailand. We need a special electricity tariff for data centers.
❌ Weak Cybersecurity – Indonesia faces frequent data breaches. Cybersecurity standards must be stricter.
❌ Uncompetitive Regulations – PP 71/2019 allows strategic data to be stored overseas, weakening local data center growth. We need a revision.
❌ Lack of Skilled IT Professionals – We need massive workforce upskilling to meet demand.

3. How We Compare with Regional Rivals (Malaysia & Thailand)

Factor	Malaysia	Thailand	Indonesia
Tax Incentives	✅ 10-year tax exemption for large data centers	✅ Up to 70% tax discount for 15 years	❌ High taxes, no special incentives
Electricity Costs	⚡ $0.05/kWh (cheap & stable)	⚡ $0.06/kWh (subsidized)	⚡ $0.09-0.12/kWh (expensive & unstable)
Regulations	📜 No restrictions on foreign ownership	📜 Fast licensing	📜 Complex bureaucracy, foreign ownership limits
Global Connectivity	🌍 Direct access to global undersea cables	📡 Good connectivity	🚧 Limited infrastructure, higher latency
Cybersecurity	🔒 Strict standards (ISO 27001, SOC 2)	🔒 Strong regulations	🔓 Weak protection, frequent breaches
IT Workforce	🎓 Highly skilled & globally certified	🎓 Expensive but experienced	🎓 Shortage of certified professionals
Green Energy	☀️ 50% data centers use renewable energy	🌿 Targeting 30% green energy by 2030	⚡ Only 5-10% use green energy
Approval Speed	⏳ ≤6 months	⏳ 3-6 months	⏳ ≥12 months (slow & bureaucratic)

💡 Bottom Line: Indonesia needs to fix regulations, reduce energy costs, and build better connectivity to compete effectively.

4. The Vision: Making Indonesia Southeast Asia’s Data Center Hub

Our 2030 Goals

🎯 Attract USD 10 billion in data center investment
🎯 Cut electricity costs for data centers by 30%
🎯 Ensure 50% of power for data centers comes from renewable energy
🎯 Certify & train 100,000 data center professionals

5. Annual Action Plan (2025-2030)

2025: Laying the Groundwork

✅ Revise PP 71/2019 – Require strategic data to be stored locally
✅ Implement tax breaks & electricity incentives for data centers
✅ Create fast-track investment approval

2026: Building Hyperscale Data Centers

✅ Develop 5 major data center hubs in Jakarta, Batam, Surabaya, Kalimantan, and Medan
✅ Expand fiber optic networks
✅ Start smart energy grid development

2027: Strengthening Cybersecurity

✅ Enforce ISO 27001 & SOC 2 standards for all data centers
✅ Establish Cybersecurity Task Force
✅ Introduce AI-based security systems

2028: Transitioning to Green Energy

✅ 30% of power for data centers must come from renewables
✅ Build solar farms & hydroelectric plants for data center power
✅ Provide electricity discounts for green-certified data centers

2029: Expanding Global Connectivity

✅ Launch new undersea cables for lower latency
✅ Develop edge computing infrastructure

2030: Achieving Our Vision

✅ Indonesia surpasses 1,000 MW in total data center capacity
✅ 50% energy use comes from renewables
✅ USD 10 billion in new investments secured

6. Securing the Future with Cybersecurity & Data Protection

🔐 Mandatory encryption & AI-driven threat detection
🔐 ISO 27001 & SOC 2 compliance for all data centers
🔐 Fines up to IDR 100 billion for companies that fail to protect data

7. The Push for Green Data Centers

Energy Source	Potential (GW)	Current Use (GW)	Potential for Data Centers
☀️ Solar	207.8	0.29	✅ Rooftop solar & solar farms
💦 Hydropower	75	6.1	✅ Small-scale hydro plants
🌬️ Wind	60.6	0.15	✅ Coastal & highland wind farms

✅ Goal: 50% of Indonesia’s data center energy must be renewable by 2030.

Final Thoughts: The Road Ahead

Indonesia has the potential to become Southeast Asia’s leading data center hub—but we need bold reforms, strategic investments, and sustainable energy solutions.

With the right moves, we won’t just be catching up to Malaysia and Thailand—we’ll be leading the way. 🚀

Let’s make this vision a reality. 💡🔥

Blockchain & Sharia: The Ethical Path to Indonesia’s Digital Transformation

From Data Sovereignty to Economic Sovereignty

As the Chairman of IDPRO and Founder of the Indonesia Real World Asset Tokenization Association (IRWATA), I have long advocated for Indonesia’s digital and economic sovereignty. My previous article on data sovereignty emphasized that control over our digital infrastructure is not just a security issue—it is an economic imperative.

Now, we must take this conversation a step further.

Blockchain and real-world asset (RWA) tokenization provide a path toward economic sovereignty, enabling Indonesians to own their wealth, trade fairly, and access global investment opportunities—all while adhering to Sharia principles of ethical finance.

The upcoming IRWATA Summit 2025 will mark a historic turning point in Indonesia’s blockchain journey, bringing together global pioneers from XRP, Polygon, Peaq Network, and Chainlink to establish Indonesia as a hub for Sharia-compliant blockchain innovation.

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Why Blockchain and Sharia Principles Are Aligned

Islamic finance is built on justice (al-'adl), transparency (al-shafafiyah), and risk-sharing (al-musharakah)—values that blockchain technology naturally upholds.

Here’s why blockchain is a perfect fit for the Islamic economy:

✅ Eliminating Riba (Usury) through Asset-Backed Investments
Sharia law prohibits interest-based lending (riba), requiring investments to be tied to real economic activity. Tokenization of assets ensures that investments are backed by real-world value, making financial activities Sharia-compliant and speculation-free.

✅ Smart Contracts Ensure Transparent and Fair Transactions
Financial fraud, hidden fees, and unclear contracts violate Islamic finance principles. Smart contracts on the blockchain automate, verify, and enforce agreements, ensuring fairness and transparency in all transactions.

✅ Risk Sharing Instead of Risk Transfer
Unlike traditional finance, where banks shift risks to borrowers, blockchain-based models—such as Islamic DeFi (Decentralized Finance)—promote profit-sharing structures, ensuring ethical and equitable financing.

✅ Immutable Records: No Fraud, No Manipulation
Sharia law mandates honesty and accountability in trade. Blockchain’s immutable ledger ensures that transactions cannot be altered or forged, eliminating corruption, fraud, and financial injustice.

✅ Asset Ownership for All (Financial Inclusion)
Today, only 6% of Indonesians invest in capital markets. With fractional ownership through tokenization, even small investors and underbanked communities can participate in wealth creation—an essential goal of Islamic finance.

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Real-World Asset (RWA) Tokenization: A Fairer Trade System

Tokenizing real-world assets (RWAs)—such as gold, real estate, agriculture, and carbon credits—is the key to building an equitable financial system.

1. Fractional Ownership: Breaking Economic Barriers

Traditionally, access to high-value assets is limited to the wealthy. Tokenization enables micro-investments, allowing everyday Indonesians to own shares in real estate, solar farms, or agricultural lands.

✔ Example: Instead of needing billions of rupiah to buy land, Indonesians can invest Rp 100,000 in tokenized farmland, earning profits from crop yields and exports.

2. Direct Trade: Eliminating Exploitative Middlemen

In traditional commodity markets, farmers and small producers earn the least, while middlemen capture most of the profits. Blockchain connects buyers and sellers directly, ensuring fair pricing and ethical trade.

✔ Example: Indonesian rice farmers can tokenize their produce, sell directly to global buyers, and increase their income by 30%.

3. Sustainable and Ethical Investments

Sharia law mandates that investments must not harm society. Tokenization allows Indonesia to attract ethical investments in sustainability projects such as reforestation, renewable energy, and carbon credits.

✔ Example: Indonesia’s 5 million-hectare reforestation project can be tokenized, enabling global investors to fund and profit from carbon sequestration efforts.

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IRWATA’s Vision: Making Indonesia a Global Leader in Tokenization

With a $10 trillion market potential by 2030, RWA tokenization is Indonesia’s chance to lead the global blockchain revolution. Neighboring countries like Singapore and South Korea are advancing in blockchain, but Indonesia has the greatest untapped potential in natural resources, agriculture, and renewable energy.

IRWATA is already spearheading initiatives to:

🔹 Tokenize Indonesia’s key assets (toll roads, rice farms, and solar farms)
🔹 Enable global ESG investors to fund carbon credit projects
🔹 Launch blockchain-powered Islamic finance solutions
🔹 Develop a Sharia-compliant Central Bank Digital Currency (CBDC)

The IRWATA Summit 2025 on January 26, 2025, will be a catalyst for these projects, uniting policymakers, investors, and blockchain leaders to drive Indonesia’s digital economy forward.

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Indonesia Must Act Now—The World Is Watching

The world is rapidly shifting towards blockchain-based economies. Google, BlackRock, and major financial institutions are already investing heavily in real-world asset tokenization. If Indonesia delays, we risk losing out on this historic opportunity.

By embracing blockchain and Sharia-compliant tokenization, Indonesia can:

✅ Attract Foreign Direct Investment (FDI) to fund infrastructure and sustainability projects.
✅ Reduce financial exclusion by making investment accessible to all Indonesians.
✅ Position itself as a global leader in ethical, transparent, and sustainable finance.