Bring Your Own Energy: Danantara's New Terms for AI Data Centers in Indonesia

Key takeaways

• Danantara, Indonesia's sovereign investment fund, says it will announce several data center and AI investments at the New Asia Forum in Bali on 3 to 4 December 2026. It has also set out the terms: developers should bring their own energy instead of drawing on PLN's public grid, and use closed-loop cooling, with water treatment or desalination where needed.
• The terms came less than four weeks after West Java halted BDx's 640 MW AI campus near the Jatiluhur reservoir over missing permits and its projected water use of about 384 liters per second.
• The power gap is large. Indonesia has roughly 394 MW of data center capacity in operation, while the energy minister now says data centers will need about 20 GW more, equal to 20% of the country's current generating capacity.
• Indonesia still has no national rule on data center water or energy use. Three institutions have now proposed three different fixes: Danantara's investment conditions, a Ministry of Industry plan to confine data centers to industrial estates, and a Komdigi call for cross-sector site screening before permits are issued.

A new condition for building in Indonesia

On 22 October 2026, at a media briefing at Wisma Danantara in Jakarta, Stefanus Ade Hadiwidjaja, managing director for investment at Danantara Investment Management, said the fund had "several projects, including in data centers," to announce at the New Asia Forum in December. He then described how Danantara would judge them. Large data centers should follow a principle he called Bring Your Own Energy, or BYOE, so they do not add strain to the national grid. Cooling should be closed-loop to cut water consumption, and water treatment and desalination are being considered. Each deal will also be assessed on emissions, grid readiness, data security and environmental impact.

None of these conditions is yet a regulation. But they come from the state's largest investor, which plans to co-invest in and anchor the deals it announces, so they work as terms of entry for anyone who wants Danantara's money. The timing is also hard to separate from Jatiluhur. At the end of September, West Java's provincial government stopped construction of BDx's AI Campus 2 just days after its groundbreaking, because the project had neither an environmental impact assessment (AMDAL) nor a building approval (PBG), and because its water needs had not been settled. We covered that case and the wider market in Indonesia's AI data center boom runs into water and power limits.

Danantara's statement is, in effect, an answer to the question Jatiluhur raised: if Indonesia wants AI campuses of hundreds of megawatts, who supplies the power and the water? Danantara's answer is that the developer does.

20 GW additional power the energy minister says Indonesia's data centers will need, about 20% of current national capacity

~394 MW data center capacity operating in Indonesia in the first half of 2026 (Mirae Asset)

~1 GW the size of Danantara's own data center development program, according to its CTO

Why "bring your own energy"

The arithmetic behind BYOE is visible in the numbers officials have published this month. On 19 October, at Bali Tech Week, Energy Minister Bahlil Lahadalia said that after talking to PLN's president director, he estimated that data centers would need about 20 GW of additional electricity, equal to about 20% of Indonesia's current capacity. He noted that the data centers of the cloud era needed 10 to 30 MW each, while AI facilities can need anything from 100 MW to 1 GW.

For comparison, PLN's entire 2025 to 2034 electricity supply plan (RUPTL) adds 69.5 GW of new capacity, including 42.6 GW of renewables. If data centers really needed 20 GW, they would absorb almost 30% of a decade of planned additions. Forecasts vary a great deal, as the chart below shows, but every one of them is many times larger than what is operating today.

Time is the other reason. Mirae Asset estimates that energising 100 MW in Indonesia takes about 36 months, against about 12 in Malaysia, and some developers say building a substation alone can take two to three years. A developer that builds its own generation, whether a solar farm with batteries, a gas plant or a dedicated renewable supply contract, can in principle move faster than the grid. PLN Batam's 450 MW supply contract with DayOne, which Bahlil called the largest data center power contract in Indonesia, shows the other route: very large, dedicated deals negotiated campus by campus.

Indonesia would not be the first country to make data centers carry their own power. In December 2025, Ireland's energy regulator finalised a rule requiring new data centers above 10 MVA to provide dispatchable generation or storage on site or nearby, and to match 80% of their annual demand with new renewable electricity generated in Ireland within six years. Ireland got there after data centers grew to use more than a fifth of the country's metered electricity, according to its Central Statistics Office. Indonesia is trying to set the condition before that happens.

BYOE does not settle what kind of energy that should be. Pandu Sjahrir, Danantara's chief investment officer, wrote in Fortune in April that Indonesia's reliance on coal could limit its ability to attract AI investment, because many large tech buyers have binding clean energy commitments. A rule that makes data centers bring their own power without saying where it comes from could just as easily produce captive coal or gas plants as solar farms. That is why the energy think tank IESR wants a separate requirement for direct renewable supply of at least 35% by 2030 and 50% by 2040.

The water clause

The second half of Danantara's terms deals with water, and here the choice of cooling technology matters more than the size of the campus. Data center consultant Devy Endry gave kumparan a simulation of three common systems for a 1 MW load. A conventional cooling tower needs about 3.4 cubic meters of make-up water an hour to replace what evaporates, about 82,000 liters a day. An adiabatic dry cooler, which sprays water only when the air is hot, needs about 0.8 cubic meters an hour, about 19,000 liters a day. A dry cooler, a fully closed loop, needs no make-up water at all. The trade-off is electricity: closed systems rely on fans and chillers that draw more power, especially in a humid tropical climate.

Scaled to a 640 MW campus, the gap between the first and last option is the gap between a small city's water supply and almost nothing. That is why closed-loop cooling has become the common demand of Danantara, IESR and the Johor state government, which said in March 2026 that it would no longer approve data centers with high water demand. Desalination, the other option Danantara mentioned, makes most sense on the coast and the islands. Bahlil has pitched Batam, Karimun and Bintan as a new hub partly because, he said, they have water and fewer people than Java. Batam's own residents might disagree. On 5 October, hundreds of them, most of them women, protested at Nongsa Digital Park over months of disrupted water supply that they blame on data center construction. BP Batam attributes the shortages mainly to El Niño.

Danantara's answer to Jatiluhur is simple to state: if a data center needs a power plant and a water source, the developer should bring both.

Three ministries, three answers

Danantara is not the only body trying to write the rules after Jatiluhur. In the four weeks since the halt, at least four parts of government and one major think tank have offered their own fixes, and they do not all point in the same direction.

What is missing is a single rulebook. As Katadata noted in an analysis on 8 October, Indonesia has no regulation written specifically for data center investment. Licensing currently runs through general rules, PP 28/2025 and Komdigi Regulation 15/2025, with water governed by PP 30/2024 and environmental approval by PP 22/2021. Unlike Malaysia, Indonesia has no single window for data center permits. In practice, that left a provincial governor to decide Jatiluhur's fate on a site visit.

Indonesia's neighbours have gone further. Singapore paused new data centers from 2019 to 2022 and now allocates capacity in rounds, with a power usage effectiveness (PUE) ceiling of 1.3. Malaysia's sustainability guideline bars new facilities from areas with a water stress index of 0.8 or above, and Johor adds a state-level review of water and energy. The Netherlands no longer permits new data centers larger than 10 hectares or 70 MW, and Amsterdam has paused them until 2030.

From landlord to ecosystem

The conditions also say something about how Danantara wants to make money from data centers. At a press conference on 19 October, Danantara's chief technology officer, Sigit Puji Santosa, put it bluntly: "If we only lease land, the impact is not big." By his estimate, a 100 MW-class data center built on a land-leasing model brings in about US$100 million to US$150 million in revenue on an investment of US$3 billion to US$4 billion. If Indonesian companies also supply chips, AI control systems and other technology, he said, revenue could reach US$1.5 billion or more. Danantara has signed a cooperation contract with UK chip designer Arm covering six industrial sectors, one of them data centers.

Sigit has also said that demand is not the problem. In August he told ANTARA that "if we build 100 megawatts, 200 megawatts, it is immediately sold out," and that customers wait six months to a year for capacity. At a Danantara workshop in September, Telkom's data center arm NeutraDC said it plans up to 1 GW of AI data center capacity in Batam, Greater Jakarta, Java and Manado, and a survey of more than 70 state-owned companies projected that AI could account for about 70% of data center use by 2030.

Put together, this is a more ambitious position than courting hyperscalers with cheap land and power. Danantara wants data centers that pay for their own energy, use little water, involve local companies and leave technology behind. Whether global AI developers will accept all of those terms at once, while Malaysia and Thailand compete for the same projects, is the open question.

What to watch next

• 26 to 28 October, Jakarta. The Danantara Technology Innovation and Investment Forum, where AI and digital infrastructure is one of six focus sectors and partnership announcements are possible.
• 3 to 4 December, Bali. The New Asia Forum. The first test of BYOE will be whether the data center deals announced there name their energy source and cooling design.
• The industrial estate rule. If the Ministry of Industry's amendment passes, it will move future campuses away from reservoirs like Jatiluhur and into estates with planned power and water.
• The Jatiluhur AMDAL. BDx says it will comply with all input. The final assessment, and any change to its cooling design, will show what the province considers acceptable.
• A national standard. The data center association IDPRO favours performance standards and plans an Indonesia Sustainable Data Center Index. IESR wants binding limits. Neither exists yet.

Frequently asked questions

What is Danantara's "Bring Your Own Energy" principle?

It is a condition Danantara says it applies to data center investments: large projects, especially AI data centers, should secure their own power supply instead of drawing on PLN's public grid, so they do not strain electricity for other users. Danantara announced it on 22 October 2026. It is an investment criterion, not a government regulation.

When will Danantara announce its data center investments?

Danantara says it will announce several data center and AI investments at the New Asia Forum in Bali on 3 to 4 December 2026. It is also holding a technology investment forum in Jakarta on 26 to 28 October 2026.

Why was the Jatiluhur data center stopped?

West Java's provincial government halted BDx's 640 MW AI Campus 2 in late September 2026 because it lacked an environmental impact assessment (AMDAL) and a building approval (PBG). Its projected water use, about 384 liters per second drawn from the Jatiluhur reservoir, was also a major concern.

How much electricity will Indonesia's data centers need?

Estimates vary widely. Indonesia had about 394 MW operating in the first half of 2026. Komdigi has estimated more than 2 GW by 2029, IDPRO projects about 11 GW of capacity by 2030, the energy minister said in October 2026 that about 20 GW more is needed, and PLN has estimated demand could reach 25 GW by 2035.

Does closed-loop cooling use no water at all?

A fully closed dry cooler needs no make-up water once it is filled, because the water circulates without evaporating. It uses more electricity instead. Cooling towers lose water to evaporation, about 82,000 liters a day per MW in one industry simulation, and adiabatic coolers fall in between.

Does Indonesia have rules on data center water and energy use?

Not yet. Data centers are licensed under general regulations, and there is no national standard on water use, power usage effectiveness or renewable supply. The Ministry of Industry has proposed requiring data centers to be in industrial estates, and Komdigi has called for cross-sector site review.

Where does the government want new data centers built?

The energy minister has promoted Batam, Karimun and Bintan as a new hub, citing water availability, lower population density and renewable energy potential. Batam already has about 1.47 GW of capacity available, committed or in development.

Sources

• Danantara Siapkan Investasi AI dan Pusat Data, Perhatikan Kebutuhan Energi, Republika, 22 October 2026
• Danantara Siapkan Umumkan Proyek Investasi Strategis di NAF 2026, Bisnis.com, 23 October 2026
• Danantara Gelar New Asia Forum 2026, Bidik Investasi 30 Miliar Dolar AS, Republika, 22 October 2026
• Danantara Bakal Umumkan Investasi Data Center dan AI, detikFinance, 22 October 2026
• Pusat Data Butuh Tambahan 20 GW, Bahlil Siapkan Energi Bersih dan Hub Baru di Batam–Karimun–Bintan, Ministry of Energy and Mineral Resources, 19 October 2026
• Danantara Bidik Cuan dari Ekosistem Data Center, Tak Hanya dari Sewa Lahan, Bisnis.com, 19 October 2026
• Danantara Bidik Investasi Data Center AI Rp30 Triliun, KabarBursa, 20 October 2026
• DTIIF 2026 Connects Global Tech, Innovation, and Capital, Danantara Indonesia, 14 October 2026
• Kemenperin Siapkan Aturan Data Center Wajib Berada di Kawasan Industri, Bisnis.com, 13 October 2026
• Komdigi soal Data Center di Jatiluhur Disetop: Lokasi Perlu Dikaji Lintas-sektor, Katadata, 8 October 2026
• Ketika Data Center Tumbuh Lebih Cepat dari Regulasi, Hak Publik Jadi Taruhan, Katadata, 8 October 2026
• Benarkah Data Center AI Menghabiskan Banyak Air? Ini Hitung-hitungannya, kumparan, 7 October 2026
• Data Center Jatiluhur, BDx Siap Penuhi Amdal dan Libatkan Warga, Bisnis.com, 5 October 2026
• IESR Supports Temporary Shutdown of BDx Data Center in Jatiluhur, IESR, 1 October 2026
• Bersama Danantara, TelkomGroup Siapkan Infrastruktur Data Center Menuju Sovereign AI Indonesia, Telkom Indonesia, 22 September 2026
• Danantara eyes wider data center investment as demand surges, ANTARA, 28 August 2026
• Danantara CIO: Indonesia can anchor the AI and energy economy, if governance keeps pace, Fortune, 11 April 2026
• CRU publishes long-awaited final policy on data centre connections, William Fry, 15 December 2025
• Data Centers and AI, Mirae Asset Sekuritas Indonesia, 17 September 2026 (PDF)