Water, Power and Permits Now Decide Where Indonesia's AI Data Centers Get Built

Key takeaways

• On 30 September 2026, West Java's provincial government halted construction of BDx's planned 640 MW AI data center campus near the Jatiluhur reservoir, eight days after work began, citing incomplete environmental and building permits and the project's water needs.
• Indonesia has about 394 MW of data center capacity in operation and 1,221 MW in the pipeline to 2030, according to Mirae Asset Sekuritas. Malaysia has more than 1,300 MW live and 3,252 MW in the pipeline.
• Indonesia's selling point is cheap power, about 6.3 US cents per kWh against 10.6 cents in Malaysia and 21.3 cents in Singapore. Its weak point is time: connecting 100 MW to the grid takes about 36 months, against 12 in Malaysia.
• Water is becoming the binding constraint. The Jatiluhur campus was expected to need about 384 liters per second. In Batam, officials say data center growth will have to be limited because the island's reservoirs cannot keep up.

Eight days at Jatiluhur

Construction of BDx Data Centers' "AI Campus 2" began on 22 September 2026, about five kilometers from the Jatiluhur dam in Purwakarta, West Java. The campus was planned at 640 MW, with a first building of 120 MW due to open in early 2027, backed by a US$320 million loan and 845 MVA of power allocated by PLN. On 30 September, the provincial government stopped the work.

The formal reason was paperwork: the project did not yet have its environmental impact assessment (AMDAL) or its building approval (PBG) from Purwakarta. The political reason was water. Governor Dedi Mulyadi said the campus's water requirement, which officials put at about 384 liters per second, had to be settled before construction, not after operations begin. Jatiluhur is not an ordinary reservoir. It supplies about 81% of Jakarta's piped water and irrigates around 242,000 hectares of rice fields that produce two harvests a year.

The halt may be temporary. Permits can be completed and water allocations negotiated. But it shows a question that Indonesia's data center plans have mostly not answered in public: the land and the power are available, but who decides how much water and how much grid capacity an AI campus is allowed to take?

640 MW planned capacity of the halted BDx campus at Jatiluhur, more than 1.5 times Indonesia's entire operating data center capacity

384 L/s water requirement cited by West Java officials, about 33 million liters a day

36 months typical wait to connect 100 MW to the grid in Indonesia, against 12 in Malaysia (Mirae Asset)

How big Indonesia's data center market really is

For all the announcements, Indonesia's operating base is still small. Mirae Asset Sekuritas, in a report published on 17 September 2026, counts about 394 MW of live capacity nationally in the first half of 2026, 356 MW of it in greater Jakarta and 82 MW in Batam. The pipeline to 2030 is 1,221 MW. Other estimates are higher: figures cited by CNBC Indonesia put existing capacity at 580 MW in 182 facilities, with 1.3 GW more planned. The gap reflects what each count includes, such as enterprise and telecom server rooms, but the order of magnitude is the same.

Set against its neighbours, Indonesia is a large market that has not yet been built. Johor, just across the strait from Singapore, has more than 1,100 MW live and almost 2,500 MW planned. Singapore has about the same live capacity as Johor but very little room left to grow. Jakarta's vacancy rate is also telling: about 20% of its colocation space is empty, against less than 1% in Johor. Indonesia's problem has not been demand for existing racks. It has been the pace at which large new campuses can be energised.

Cheap power, slow grid

The economic case for Indonesia is straightforward on paper. Mirae Asset puts industrial power at about 6.3 US cents per kWh, against 8.8 cents in Vietnam, 10.6 cents in Malaysia and 21.3 cents in Singapore. Building costs are also lower, at about US$8.9 million per MW against US$9.9 million in Malaysia. For an AI campus, where electricity is the largest operating cost, a gap of four cents per kWh adds up quickly. A 100 MW facility running at full load uses about 876 million kWh a year, so every cent per kWh is worth roughly US$8.8 million a year.

The catch is time. According to the same report, energising 100 MW in Indonesia takes about 36 months, against about 12 in Malaysia. For developers trying to sell capacity to AI companies that want it within a year, that difference can matter more than the electricity price. It also explains why so many projects are announced and so few are live.

Government messaging has focused on supply. On 22 September, Energy Minister Bahlil Lahadalia told an industry event that power for data centers was "not a problem" and pointed to hydropower potential in Papua and Kalimantan. That potential is real, but it is far from Jakarta and Batam, where the fiber, the customers and the low-latency links to Singapore are. BP Batam says it can support 1.47 GW of data center capacity. The Jatiluhur campus alone would draw more than three times the 180 MW generated by the dam's own hydropower plant.

The water arithmetic

Water is the newer constraint, and the numbers line up surprisingly well across sources. The 384 liters per second cited for Jatiluhur works out to about 33 million liters a day, or roughly 52,000 liters per MW per day across 640 MW. The initial phase, put at 6,000 cubic meters a day for 120 MW, gives about 50,000 liters per MW. In Batam, NeutraDC-Nxera's 56 MW campus is expected to use about 3 million liters a day, or about 54,000 liters per MW. A Batam State Polytechnic researcher estimates about 25.5 million liters per MW per year, or about 70,000 liters a day.

Those figures assume evaporative cooling, which uses water to save electricity. Closed-loop and air-cooled designs use far less water but more power. That is the trade-off Johor's government chose in March 2026, when it said it would no longer approve data centers with high water demand. Use the calculator below to see what different campus sizes would mean.

At Jatiluhur's scale, a single campus would use water equal to almost 9% of everything Batam's reservoirs supply in a day. Batam shows what happens when that demand meets a small catchment. The island has no major river and little groundwater. Its six reservoirs deliver about 382 million liters a day, and in higher neighbourhoods water flows for only two hours a day. Around 18 data centers are in the pipeline there. Ariastuty Sirait, a deputy chairman at BP Batam, told Earth Journalism Network: "In the end, we will have to limit data center development. They consume too much water."

Indonesia can offer cheap power and plenty of land. What it has not yet decided is how much of its water and grid capacity it is willing to give to machines.

Who is building, and where

Greater Jakarta, especially the industrial corridor from Cikarang to Karawang, holds about 53% of Indonesia's pipeline. Batam holds about 28%, helped by subsea cables that put it less than 2 milliseconds from Singapore. All six major cloud providers, AWS, Microsoft, Google, Oracle, Alibaba and Tencent, operate in Jakarta. Mirae Asset counts US$13 billion in announced investment since 2024, covering about 1,471 MW.

What the boom delivers locally

Data centers are capital-heavy and labour-light. Putra Adhiguna, managing director of the Energy Shift Institute, estimates about 15 permanent jobs for every US$100 million invested. BDx said its Jatiluhur campus would create 2,000 to 3,000 jobs, without saying how many would be permanent. Adhiguna argues that incentives should be tied to domestic value added and to a phased shift to clean power, for example 30%, then 50%, then 70%, rather than to headline investment totals.

For Indonesian businesses, the boom still matters. More local capacity means lower latency and more options for keeping data in the country, which matters under the personal data protection law. It also makes it more realistic for Indonesian companies to run AI workloads at home instead of in Singapore. But the Jatiluhur halt is a reminder that data centers now compete with farms, cities and factories for the same water and grid capacity. As AI tools such as the Gemini and ChatGPT apps used by millions of Indonesians push demand for compute higher, that competition will only get sharper.

What to watch next

• Jatiluhur permits. Whether BDx completes its AMDAL and PBG, and what water allocation or cooling design the province accepts, will set a precedent for other campuses near reservoirs.
• A national water rule. Johor and Singapore both set efficiency conditions for new data centers. Indonesia has no equivalent national standard yet.
• Grid timelines. If PLN can shorten the 36-month wait to energise large loads, Indonesia's cost advantage becomes much harder to ignore.
• Batam's limits. BP Batam's statements suggest future approvals there may depend on desalination or recycled water.

Frequently asked questions

Why was the BDx data center in Jatiluhur stopped?

West Java's provincial government halted construction on 30 September 2026 because the project did not yet have an environmental impact assessment (AMDAL) or a building approval (PBG). Officials also said its water needs, about 384 liters per second, had to be settled before construction continued.

How much data center capacity does Indonesia have?

Mirae Asset Sekuritas counts about 394 MW of operating capacity in the first half of 2026, with 356 MW in greater Jakarta and 82 MW in Batam, and 1,221 MW in the pipeline to 2030. Other estimates, which include smaller facilities, put existing capacity at about 580 MW.

Which is the largest data center operator in Indonesia?

By live capacity, DCI Indonesia is the largest with about 128 MW, followed by DayOne (72 MW), NTT Data (67 MW), NeutraDC (44 MW) and STT GDC (42 MW), according to Mirae Asset.

Where are data centers in Indonesia located?

Mostly in greater Jakarta, especially the Cikarang, Cibitung and Karawang corridor, which holds about 53% of the pipeline, and in Batam, which holds about 28% because of its short subsea cable links to Singapore.

How much water does a data center use?

It depends on the cooling design. Indonesian projects using evaporative cooling are estimated at about 50,000 to 100,000 liters per MW per day. Air-cooled and closed-loop systems use much less water but more electricity.

Why do companies build data centers in Indonesia?

A large domestic market, data residency requirements, cheap industrial power of about 6.3 US cents per kWh, and lower building costs than in Malaysia or Singapore. The main drawbacks are slow grid connections and, increasingly, water availability.

How does Indonesia compare with Johor and Singapore?

Johor and Singapore each have more than 1,000 MW in operation, against about 394 MW in Indonesia. Johor has one of the largest pipelines in the region, but in March 2026 it stopped approving data centers with high water demand.

Sources

• Ini Proyek Data Center AI BDx di Jatiluhur yang Disetop, CNBC Indonesia, 30 September 2026
• Menakar Dampak Ekologis Pembangunan Data Center AI di Jatiluhur, Tirto, 30 September 2026
• Data Centers and AI, Mirae Asset Sekuritas Indonesia, 17 September 2026 (PDF)
• Big Tech Berebut Masuk RI, Investasi Data Center AI Diproyeksi Rp360 T, CNBC Indonesia, 13 July 2026
• A Digital Boom in a Thirsty Indonesian City, Earth Journalism Network
• Johor MB: No approval for data centres with high water demand, Malay Mail, 10 March 2026
• Pengamat nilai Indonesia menjanjikan bagi investasi data center, ANTARA, 29 September 2026
• Indonesia Jadi Incaran Investasi Data Center, ESI Ingatkan Soal Listrik dan Energi Bersih, Koran Jakarta, 30 September 2026
• Potensi Menjanjikan Data Center jadi Lumbung Cuan Baru PLN, Bisnis.com, 23 September 2026
• Indonesia Bidik Investasi Data Center, Bahlil Soroti Potensi PLTA Papua dan Kalimantan, Infoekonomi