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Accelerating Indonesia’s Data Centre Market to Boost Infrastructure

Since Indonesia is home to many start-up enterprises, the increased adoption of cloud-based services is driving data centre demand. As they establish their foundation and cater to their major local customers, such as financial institutions and other businesses, this powerful ecosystem attracts global cloud players.

To address this, a real estate developer in Indonesia has inked an agreement to establish a data centre in a new resort city south of Jakarta, Indonesia, with the country’s leading telecommunications operator. Located to the south of Bogor city, West Java, Lido City is the real estate company’s project to create a large tourist and resort destination in Indonesia that will include hotels, theme parks, a golf course, and other attractions.

We believe that our initiative will further encourage mote infrastructure investment that will support the exponentially growing local digital economy. 

– Senior Executive Director, Nongsa Digital Park

Both the company seek to develop an integrated infrastructure and high-tech ecosystem, as well as establish a technology hub in the country. within Lido City’s Tourism Special Economic Zone (SEZ).

“Our telecom firm’s experience in the digital business infrastructure and ICT solutions combined with the strategic location and development ambitions of the SEZ Lido City will highlight Techno Park to be one of the largest high-tech ecosystems in Indonesia,” said the President of the real estate company.

In addition, a Singapore-based company announced today that it would expand its first data centre on the Indonesian island of Batam to bolster connectivity and digital links between Singapore and the region. The data centre operator announced that the 30MW data centre would be in Batam’s Nongsa Digital Park.

Data Centre First will be the first international data centre operator to develop a presence on the island because of this agreement. Nongsa One, as the new data centre is known, is scheduled to open by the end of 2023. It will be designed and built following Uptime Tier III standards, which refer to the data centre’s ability to maintain cooling efficiency. A Tier III data centre requires no shutdowns when equipment needs maintenance or replacement.

According to a press release from the company, the growing demand for Indonesian Internet users, fuelled by a more open and competitive telecommunications industry in Indonesia, continues to attract foreign investment into the country.

“The US$40 million (S$54 million) Phase 1 investment in Nongsa One DC campus from Data Centre First will help to strengthen the connectivity and ‘digital bridge’ between Nongsa and Singapore.” Singapore’s Minister for Trade and Industry Gan Kim Yong said: “Nongsa One will bolster Nongsa’s status as a growing hub for tech and information technology services, as well as data centres.

Data Centre First’s investment demonstrates the potential of a near-shoring model for Singapore-based data centre operators to expand capacity and meet Southeast Asia’s increasing demands for data centre services. He added Singapore looks forward to continuing its close collaboration with Indonesia to support the development of the data centre industry in Nongsa.

This single project is expected to catalyse up to $300 million in foreign direct investment into Nongsa Digital Park. It has the potential to stimulate the local economy by creating a large multiplier effect, thereby accelerating Indonesia’s digital transformation.

The park’s Chief executive also mentioned that as the first data centre development in the Nongsa special economic zone, this cutting-edge infrastructure demonstrates the digital park’s commitment to attracting both best-in-class talent and key global infrastructure partners, while affirming our role as a “digital bridge” to Indonesia’s digitisation road map.

More data centre facilities, both inside and outside of the Greater Jakarta area, are expected as the digital economy grows. Other regions will benefit from government assistance in improving infrastructure through reliable power sources and fibre optics for better network connectivity and internet penetration. Ultimately, Indonesia’s data centre business is here to stay, and it will see a considerably greater development phase in the years ahead as the population transitions to a new digital environment.

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