Maybank Investment Bank has hold positive view on data center expansion in Indonesia while seeing the country’s potential as a data center hub is underpinned by three structural advantages: abundant renewable energy resources, extensive land and water availability, and a large, internet-savvy population of over 280 million.

Cited IDPRO, Maybank said in a note on last Friday that Indonesia’s data center capacity is expected to surge from 637MW (as of May 2026) to 2.7GW by 2030.

As of mid-2026, PLN reported 1.9GW of installed capacity across 159 customers, with 1.3GW concentrated in West Java (63 customers).

PLN projects total capacity to reach 25GW by 2034, supported by the Power Acceleration Service (PAS) program, which allows investors to build their own infrastructure to
speed up network expansion.

“We estimate that 1MW of IT load can support either six AI-server racks (at about 150kW each) or 60–80 conventional servers (at about 12–15kW per rack),” said the research house.

It added the number of people served per server will ultimately depend on the computing-power mix deployed, underscoring the importance of aligning infrastructure growth with workload demand.

According to Maybank, data centers in Southeast Asia are concentrated in Singapore, given its position as the region’s primary interconnection hub.

Meanwhile, data traffic is typically routed through Hong Kong and Japan before reaching the United States.

Maybank sees an opportunity for Indonesia to develop the eastern region for hyperscale data centers, with Manado serving as a landing point for an alternative data route to the United States.

In addition, Indonesia could extend connectivity to the Philippines, Taiwan, and Japan from North Sulawesi.

Maybank also said Jakarta remains the backbone of Indonesia’s internet ecosystem, largely due to historical factors in the country’s information and communication technology (ICT) development.

Java, as the most populous island, anchors demand and infrastructure.

“Data center expansion in Greater Jakarta is increasingly shifting away from the city center, notably the Kuningan area, towards Bekasi and Cikarang,

“These locations are preferred for their proximity to subsea-cable landing points, direct access to an industrial-grade electrical grid, and proximity to water reservoirs,” said the research house.

The key operators driving new capacity in Greater Jakarta include: Digital Edge, DCI Indonesia, ST Telemedia Global Data Centers (STT GDC), Princeton Digital Group (PDG), EdgeConneX, DAMAC, and BW Digital.

Maybank also viewed Batam as able to expand its power generation through gas-fired power plants and potentially leverage the Sumatra grid, which is geothermal-rich and suitable for baseload power. Solar photovoltaic (PV) can be used to reduce carbon emissions.

“The primary challenge for Batam, however, is water availability, as it has similar rainfall conditions to Johor and Singapore; hence, we see potential demand for water desalination,” said the research house.

According to the research house, Batam is in close proximity to Singapore (about 15 km by sea), with low latency (~2 ms).

Batam has domestic power-generation capacity, with estimated installed capacity of about 0.9 GW, and plans to add 860 MW of new power-plant capacity by 2032 under the RUPTL, excluding solar panels.

“We have limited visibility into Batam’s actual live capacity, but estimate it at approximately 134MW based on publicly available information data center maps,” said Maybank.

The research house estimated Batam’s data center expansion plan at about 1.3–1.8GW, based on media reports.

It is noted that DCI Indonesia (DCII) plans to build a more than 1,000MW data center in Bintan on 700ha of land.

“We view the expansion plan as gradual, as construction will take time and will be adjusted to actual demand, which may deviate from the current aggressive target,” it said.

Maybank viewed the adoption of AI in Indonesia as being at a nascent stage and think it will be a long-term trend (53 percent adoption in year three, faster than internet);
developers are aiming for artificial general intelligence (AGI), scaling up from large language models (LLMs).

“We view affordable AI desktops (about $4,000/unit) and GPU-server rentals on NeoCloud (on an hourly or monthly basis) as accelerating AI development,” said the research house.

At the production level, AI development will require data center capacity, due to the enormous power consumption required to run servers and cooling systems: power density could rise from 15kW (legacy: data storage, CDN) to 150kW
and is projected to reach 1MW/rack (for AI’s GPU-based computing).

Maybank believes AI workloads are best deployed on NeoCloud or proprietary platforms, given their computing and memory requirements, supporting long-term demand for data centers.

“We expect Indonesia’s server demand to be driven primarily by foreign hyperscalers and enterprises rather than domestic customers (capacity forecast up from 637MW to about 2.7GW by 2030, per IDPro estimate),” said the research house.

Based on its channel checks, co-location rates range from IDR 10 million ($567.96) to IDR 36 million per rack per month in Indonesia.

Key upside hinges on improvements in power infrastructure, lower taxes on ICT components, and a more supportive regulatory framework.

On profitability, Maybank sees legacy data centers generate earnings before interest, taxes, depreciation, and amortization (EBITDA) and net margins of 23 percent to 53 percent and 7 percent to 17 percent, respectively.

Meanwhile, NeoCloud providers generate EBITDA margins of 56 percent to 66 percent (with a net margin of 1 percent in FY28).

Maybank also viewed industrial estates as the first-round beneficiaries (with typical land plots of 5–30ha, and land prices of $244–266/square meter).

According to the research house, data center expansion in Indonesia is led by private companies (with DCII IJ as the first mover) and is largely supported by foreign-backed investments, as data center development is capital expenditure (capex)-intensive and requires anchor tenants.

For Maybank, the primary challenge for Indonesia’s data centers is on the electricity side, as PLN is the sole off-taker and distributor of electricity.

“We view Indonesia as needing to accelerate investment in transmission and distribution, as ultra hyperscale data centers start at hundreds of MW and can scale to GW
capacity,” said the research house.

It is noted that in Indonesia, a typical geothermal plant has capacity of about 55 MW per plant.

“In addition to electricity, we view soft infrastructure as also important, including regulations and the broader economic and social backdrop,

“The government must provide clarity on data-center regulations and fiscal incentives, such as import taxes on components, as well as environmental regulations, including water pricing and incentives for data centers that may require water desalination in the Batam area,” it added.

Another consideration is Indonesia’s electricity-tariff structure, as data centers may offer higher economic value creation per unit of electricity consumed, despite generating fewer direct jobs than labor-intensive industries such as manufacturing.

Maybank also viewed Vietnam as a potential competitor for Indonesia as a data center manufacturing hub.

“Our view is driven by its proximity to China, given the land-based distance (Hanoi to Shenzhen is about 1,300km),” it said.

Meanwhile, it noted strategic policy can accelerate data center expansion in Vietnam, as a data center only requires land, electricity, and fiber-optic connectivity.

“Based on our research on renewable energy, Vietnam made structural changes to its electricity policy, which accelerated the adoption of solar panels,” it said.

At the same time, it viewed battery energy storage prices as remaining more affordable.

Moreover, Vietnam could import electricity from China once China connects its infrastructure to Southeast Asia.

To fully realize the data center potential, Maybank opined that Indonesia must strengthen electric-grid connectivity and establish direct fiber connections to the US to reduce latency.

In parallel, regulatory clarity and supportive fiscal policies will be essential to accelerate industry growth and attract long-term investment.

Indonesia’s data center boom faces growing infrastructure challenges – BMI