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Tech giants prefer Malaysia for data centers, RI govt minister admits
Despite its large population and abundant renewable energy resources, Indonesia is trailing Malaysia in attracting foreign direct investment to the industry.
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Communications and Information Minister Budi Arie Setiadi attends a meeting with House of Representatives Commission I overseeing information at the Senayan legislative complex in Jakarta on Sept. 10, 2024. (Antara/Muhammad Iqbal)
Communications and Information Minister Budi Arie Setiadi has admitted that global tech companies like Google and Microsoft prefer Malaysia to Indonesia as a location for data centers.
He attributed this to lower electricity costs and attractive fiscal incentives in the neighboring country.
“In Malaysia, electricity costs just 8 [US] cents per kilowatt-hour [kWh]. They also offer tax exemptions for capital goods and provide legal certainty for investors,” Budi said on Wednesday, as quoted by Kontan.
Setyanto Hantoro, president commissioner at Indonesian data center operator Bersama Digital Data Centres (BDDC), highlighted that Indonesia’s electricity prices, ranging from 11 to 12 cents per kWh, were not competitive.
Budi emphasized that Indonesia’s large population and abundant renewable energy resources could make it an appealing market for modern data centers, yet the country was only expected to attract $634 million in data center investment this year, significantly less than Malaysia.
He underscored the need to improve the investment climate in the country and offer competitive incentives to attract global players.
