Sunday, December 10, 2023

State-owned enterprises minister plans to make Indonesia as leading data center hub in SE Asia

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Mahinda Arkyasa




The Minister of State-Owned Enterprises (BUMN), Erick Thohir, has ambitious plans to position Indonesia as the leading data center hub in Southeast Asia. This vision involves encouraging the state-owned company PT Telekomunikasi Indonesia Tbk (Telkom) to establish partnerships within the ASEAN region.

Erick believes that this target can be expedited by leveraging 166 collaborative projects currently present in Southeast Asia. To elaborate, 73 of these projects are still in the potential phase, with a total estimated value of US$17.8 billion.

“If we don’t prepare data center infrastructure, it will become a problem in the future. One way we are addressing this is through partnerships with Telkom and Telkomsel in Southeast Asia,” stated Erick at Hotel Mulia on Tuesday, September 5, 2023.

Becoming a key player

Erick is confident that Telkom will ultimately become one of the major players in the data center industry in Southeast Asia. He deems this goal feasible, particularly because Telkom’s subsidiary, PT PT Dayamitra Telekomunikasi Tbk or Mitratel, is already the largest telecommunications tower business in Southeast Asia.

Nonetheless, Erick emphasizes that Indonesia should not just be a market in Southeast Asia but a key player in the business. Therefore, he intends to increase the number of state-owned enterprises that can compete on a global level.

“The Ministry of State-Owned Enterprises’ goal for 2024-2034 is to have more state-owned companies that can compete globally,” he said.

Focus on renewable energy

In addition to data centers, Erick plans to capitalize on some of the 166 projects in Southeast Asia that focus on renewable energy. According to him, one domestic development in the renewable energy industry is the construction of floating solar power plants.

Erick calculates that the floating solar power plants owned by PT Masdar Mitra Solar Radiance can be increased from around 130,000 megawatts to 1 million megawatts, or 1 gigawatt. This is due to the relaxation of the restrictions on the area of lakes that can be utilized, increasing from 15% to 25%.

“Imagine, our lakes could become friendly places for generating new renewable energy. We are opening up this investment domestically,” said Erick.

Substantial funds needed

Previously, President Joko Widodo, or Jokowi, estimated that the funding required for the energy transition in the ASEAN region would reach $29.4 trillion, or approximately Rp 448 quadrillion. This substantial capital can be acquired through innovative financing schemes involving beneficial and sustainable partnerships.

Jokowi also encouraged ASEAN member countries to actively participate in downstream activities in the industry and the development of electric vehicle (EV) ecosystems. He believes that these two strategies can boost the economic growth of ASEAN.

Mahinda Arkyasa






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