Singaporean Banks To Fund New Data Centre in Indonesia

As part of ongoing efforts to expand Southeast Asia’s digital infrastructure, two Singaporean banks – DBS and UOB – on Thursday announced that they have jointly provided a loan of $412.72 million to finance the development of a new data centre campus in Batam, Indonesia.

The data centre project, jointly developed by Singapore-based data centre developer and operator DayOne and the state-owned Indonesia Investment Authority (INA), is backed by the largest Indonesian rupiah-denominated financing agreement ever secured for such a development.

The initiative marks a significant expansion of DayOne’s presence in Indonesia and represents INA’s first investment in the sector.

Proceeds of the loan will be used to develop and operate three data centres located in the Nongsa Digital Park (NDP) in Batam, which aims to be a ‘digital bridge’ between the two economies through which Singapore companies can leverage Indonesia’s infrastructure and digital talent pool.

It will also enable Indonesia to benefit from Singapore’s technological advancement and investment flows.

Upon completion by end-2025, the DayOne Nongsa Digital Park Data Centre campus will have a combined IT load capacity of around 72 MW. This will account for around 5% of Indonesia’s projected data centre capacity of 1.41 GW by 2029.

This deal comes amidst an ongoing digital transformation in Southeast Asia that is driving demand for data centre computing power. According to research by Boston Consulting Group, the region’s demand for data centres is expected to surge up to 6.5 GW by 2030, triple the existing capacity as of 2023.

This is driven by the region’s continued digital transformation, growing regional connectivity and the acceleration of artificial intelligence adoption. The Singapore-Johor-Batam corridor – a major hub for data traffic in Southeast Asia – is projected to meet as much as half of this demand, with the corridor’s capacity estimated to reach up to 3.3 GW by 2030.

Landmark Financing

DayOne CEO Jamie Khoo said that this landmark financing, the largest rupiah-denominated facility ever secured for a data centre development, is a strong endorsement our proven ability to deliver digital infrastructure at speed and scale.

“It also reflects deep confidence in our long-term commitment to Indonesia and in the strategic importance of the DayOne NDP campus in strengthening the region’s digital backbone. Our campus will be home to Indonesia’s most advanced AI-ready data centre, designed to support the next wave of digital transformation. We are proud to contribute to Indonesia and Southeast Asia’s digital growth with high-performance infrastructure that meets the evolving needs of our customers,” Khoo added.

Amit Sinha, Group Head of Telecommunications, Media & Technology, Western MNCs and Digital Economy, DBS Bank, said that this transaction is a strategic investment in the future of Southeast Asia’s digital economy.

Expanding the region’s data centre capacity will accelerate the digital transformation of businesses within the region as they embrace solutions such as artificial intelligence, cloud services and real-time processing.

The strengthened digital connectivity between Indonesia and Singapore better positions both markets to capture growing regional demand for computing power, he said.

Harapman Kasan, Wholesale Banking Director, UOB Indonesia, said that this partnership with DayOne and INA – in building digital infrastructure that powers a low carbon, digital economy – aligns with Indonesia’s ambition to become a regional digital hub.

“In addition, Batam plays a pivotal role in serving as a key gateway to Singapore. As a leading regional bank with deep ASEAN connectivity, we enable inclusive growth by connecting capital to infrastructure that drives innovation and sustainability,” he added.

DayOne and INA have established a joint venture to propel the growth and advancement of the data centre landscape in Indonesia.

DayOne is a global data centre pioneer that develops and operates next-gen digital infrastructure for industry leaders who demand reliable, cost effective and quickly scalable solutions. Headquartered in Singapore, it operates a network of strategically located data centres across Singapore, Johor (Malaysia), Batam (Indonesia), Greater Bangkok, Hong Kong, Tokyo, and other key hubs.