Indonesia and Finland Discuss Data Center Cooperation as AI Demand Grows

Jakarta – Indonesia’s Minister of Communication and Digital Affairs, Meutya Hafid, has discussed potential cooperation with Finland on data centers and computing infrastructure, as the government looks to meet rising demand from artificial intelligence (AI) and digital public services. 

The talks took place on Wednesday (14/10/2026) at the ministry’s office in Central Jakarta, during a meeting with Finland’s Minister for Foreign Trade and Development, Ville Tavio.

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Key Takeaways

• Indonesia and Finland discussed cooperation on data centers, computing capacity, and the digital ecosystem
• Meutya Hafid said data center planning must account for computing needs, geographic spread, and supporting infrastructure
• Most Indonesian data centers are still concentrated in one region, and location diversification is needed, according to the ministry
• Finnish firm Nokia is involved in a data center project with Indosat, described by Meutya as one of Indonesia’s largest
• A planned digital social protection program covering about 50 million beneficiaries will require stronger digital and AI infrastructure
• Finland also pointed to possible collaboration on quantum computing, AI, network infrastructure, and smart city planning in Nusantara (IKN)

Planning for Capacity, Location, and Readiness

Meutya said data center development in Indonesia needs to consider computing capacity requirements, an even geographic distribution, and the readiness of supporting infrastructure. The government is coordinating across ministries so that construction matches national needs and regional conditions.

“We are coordinating with other ministers to determine the right locations and carry out accurate calculations in building data centers,” she said.

She noted that Indonesia’s vast geography is a key consideration. Because most data centers are currently concentrated in a single region, she said, diversifying locations is necessary to support growing computing needs and spread digital infrastructure more evenly across the country.

Nokia–Indosat Project Seen as a Concrete Opening

Meutya highlighted Nokia’s participation in a data center project with Indosat as a tangible example of Indonesia–Finland technology partnership.

“This is an important milestone, not only for Indonesian companies but also for Nokia, as a Finnish company, to be involved in one of Indonesia’s largest data center projects,” she said.

Public Services Drive Demand

Meutya said computing needs will keep growing as digital technology is used to support public services. One example is the digitalization of social protection, which the government is piloting to improve how accurately aid reaches recipients, with plans to expand it to more regions.

“Overall, around 50 million beneficiaries are expected to receive assistance in cash. This certainly requires adequate digital and AI infrastructure,” she said.

She tied this to the Indonesia Digital Vision 2045, which rests on three pillars: connected, growing, and secure.

Finland Cites Climate and Clean Power

Tavio said Finland has experience in data center development, supported by its climate, energy supply, and technological progress. Relatively low temperatures reduce cooling needs, he said, and more than 95 percent of Finland’s electricity comes from fossil-free sources.

“Most of our electricity, more than 95 percent, is fossil-free. That is very good for us. So our system is also very self-sufficient,” he said.

He added that cooperation could extend to quantum computing, AI, network infrastructure, and digital capacity, as well as smart city planning in Nusantara. Finland’s government, he said, is ready to share information on public procurement and tender opportunities in Indonesia with qualified Finnish companies.

“We want to increase our participation, particularly in cooperation with Indonesia,” Tavio said.

Context: Indonesia’s Data Center Market

Growth outlook. The Indonesia Data Center Provider Organization (IDPRO) says national capacity was about 520 MW as of June 2026 and could approach 600 MW by the end of the year, reaching about 1.41 GW by 2029. IDPRO members account for more than 80% of national capacity. Property consultancy Savills, which counts differently and includes Batam, reports 535.5 MW of existing IT capacity in Greater Jakarta and 147.6 MW in Batam as of June 2026, with a pipeline of about 2.3 GW across the two hubs. The figures differ because of scope and definitions.

Concentration. Savills finds Java holds about 68.4% of data center projects and Sumatera about 27.6%, which supports the ministry’s point about geographic concentration.

Demand drivers. These include AI and cloud adoption, digitalization of government, banking, e-commerce, and telecoms, and data sovereignty rules that require public-sector data, and certain financial institution data, to be stored onshore. Savills also cites about 230 million internet users, relatively low electricity costs of about USD 0.06 per kWh (versus about USD 0.27 in Singapore), and tax incentives of 50% to 100% income tax reduction for 5 to 20 years. Announced hyperscaler commitments include Microsoft (USD 1.7 billion), Digital Edge (USD 4.5 billion), and Oracle (USD 1.2 billion).

Challenges.

• Power: large-scale electricity supply, grid connection timelines, and access to renewable energy
• Permitting: licensing involving multiple agencies and inconsistent implementation
• Equipment, land, and water: long lead times for electrical and cooling equipment, plus limited land and water
• Talent: a shortage of skilled data center professionals compared with ASEAN peers
• Connectivity: interregional links and supporting infrastructure outside the main hubs

FAQ

What did Indonesia and Finland discuss?

Potential cooperation on data centers, computing capacity, and digital ecosystem development to support AI and public services.

Where and when did the meeting take place?

At the Ministry of Communication and Digital Affairs in Central Jakarta on Wednesday (14/10/2026).

Why does Indonesia want to diversify data center locations?

The ministry says most data centers are concentrated in one region, and diversification would support rising computing demand and more even digital infrastructure.

What Finnish company is involved in Indonesian data centers?

Nokia, in a project with Indosat.

Why does the government need more AI infrastructure?

Public services such as digital social protection, planned to cover about 50 million cash-aid beneficiaries, require adequate digital and AI infrastructure.

What are the biggest obstacles for data centers in Indonesia?

Power supply and grid connection, multi-agency permitting, equipment lead times, limited land and water, and a shortage of skilled talent.

Sources: Indonesia Ministry of Communication and Digital Affairs press release (14/10/2026); IDPRO capacity figures via Intimedia; Savills, Data Centres in Indonesia, July 2026.