Indonesia’s sovereign wealth fund INA and GDS, a leading developer and operator of data centres in Asia, have announced a partnership to develop and expand data centres in the archipelago.
Both parties plan to form an equity joint venture, which will serve as a vehicle for developing a countrywide data centre platform.
The first project of the JV is the ongoing development of a hyperscale data centre campus located in Nongsa Digital Park (NDP), Batam, which has been officially designated as a Special Economic Zone (SEZ) by the Indonesian government.
By embracing GDS’s advanced Smart DC (Data Centre) solution and placing a strong emphasis on utilising local renewable energy sources, the upcoming Batam data centre campus has the potential to set an industry benchmark for the region.
“Our collaboration with GDS not only aims at scaling our digital infrastructure, but also places a strong emphasis on supporting data onshoring and enhancing data connectivity,” said Ridha Wirakusumah, CEO of INA in a statement on Friday.
By integrating the initial project in Batam with synergistic projects in Singapore and Johor, GDS can create a unique platform ideally configured to serve the digital economy in Indonesia and the Southeast Asia region, said William Huang, Chairman and CEO, GDS.
“We look forward to expanding this platform further into Indonesia in partnership with INA,” added Huang.
The potential of data centres in Indonesia is huge given the annual increase in data traffic by 40-50%. Market research projects that Indonesia’s data centre market capacity is projected to grow from 514 MW in 2023 to 1.41 GW by 2029.
However, the data infrastructure is still underpenetrated. Recognizing the gap within the digital landscape, INA is actively streamlining foreign direct investments throughout Indonesia, with a targeted approach to bolster Batam’s competitive advantage as it captures spillover demand from Singapore.
GDS’s Singapore-Johor-Batam strategy is fully aligned with INA’s approach, as it will enable low-latency connectivity across GDS’s interconnected data centres in Indonesia, Singapore, and Malaysia.
Data centre operators in Singapore are increasingly exploring alternative locations like Malaysia and Indonesia, as the city-state limits construction of new facilities due to space constraints and environmental concerns, Nikkei Asia reported recently.
Previously, INA participated in the initial public offering (IPO) of PT Dayamitra Telekomunikasi Tbk (Mitratel), one of Southeast Asia’s largest telecommunication tower owners.
Furthermore, in collaboration with BlackRock, Allianz Global Investors, and Orion Capital Asia, INA invested in the travel app Traveloka.