Powering the Future: Advancing Green Data Centers in Indonesia

February 28, 2026

Indonesia’s digital economy is expanding rapidly, driven by advances in artificial intelligence (AI) and rising demand for digital infrastructure. The World Bank projects that Indonesia’s data center capacity will grow by 16.8 percent annually through 2029, reaching 1.41 gigawatts (GW). While this expansion will accelerate Indonesia’s digital transformation, it will also significantly increase electricity consumption, underscoring the need to develop energy-efficient and low-carbon data centers.

Despite having Southeast Asia’s largest digital economy, valued at around US$90 billion in 2024, Indonesia’s data center capacity remains relatively modest at approximately 456 MW, well behind Singapore (1.4 GW) and Malaysia (1.3 GW). Clear regulatory frameworks, stronger investment incentives, and established sustainability policies in these countries have attracted hyperscale investments, while Indonesia’s data center ecosystem remains comparatively underdeveloped.

This report assesses Indonesia’s readiness to develop green data centers and identifies key policy gaps. Indonesia’s digital readiness remains among the lowest in the region in several critical areas, including data governance, cybersecurity, and ease of investment. Unlike Singapore and Malaysia, Indonesia lacks a streamlined investment framework: no single lead institution serves as an entry point for investors, requiring engagement with multiple ministries and agencies.

At the same time, access to renewable energy remains limited despite Indonesia’s vast potential — estimated at 3,686 GW — due to constraints in grid infrastructure and financing mechanisms. Currently, the renewable energy certificate (REC) scheme offered by PT PLN provides the most practical option for sourcing renewable electricity. However, many global operators prefer direct renewable energy procurement to ensure greater transparency and credibility in meeting their sustainability commitments.

With Southeast Asia’s largest digital economy and abundant renewable energy resources, Indonesia has the potential to become a regional hub for green data centers. Realizing this opportunity will require strengthening digital sector governance, expanding digital talent, and accelerating power sector reforms to enable greater access to renewable energy. Improving digital readiness while greening the power system will be critical to positioning Indonesia as a competitive and sustainable data center hub in the region.