DBS, UOB back 6.7 trillion rupiah loan facility for data centre campus in Batam’s Nongsa Digital Park

[SINGAPORE] DBS and UOB have jointly provided a 6.7 trillion rupiah (S$530 million) loan facility to finance the development of a new data centre campus in Batam, Indonesia.

The project is jointly developed by DayOne, a Singapore-based data centre developer and operator, and the Indonesia Investment Authority, the country’s sovereign wealth fund. 

It will fund the development and operations of three data centres in Nongsa Digital Park in Batam, Indonesia. 

As the largest rupiah-denominated financing agreement secured for such a development, it is part of the drive to build South-east Asia’s digital infrastructure, said DBS and UOB in a joint statement on Thursday (Jun 5).  

This comes as the region is experiencing ongoing digital transformation that is boosting demand for data centre computing power. 

Amit Sinha, group head of telecommunications, media and technology, Western multinational corporations and digital economy at DBS, called the move a “strategic investment” into the future of South-east 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 (AI), cloud services and real-time processing,” he said. 

South-east Asia’s data centre demand is set to triple from its capacity as at 2023 to 6.5 gigawatts (GW) by 2030, said the lenders, citing data from Boston Consulting Group. The region’s continued digital transformation, growing regional connectivity and acceleration of AI adoption is fuelling this growing demand.

As much as half of this demand is expected to be met by the Singapore-Johor-Batam corridor, a major hub for data traffic in South-east Asia, DBS and UOB said.

The corridor’s capacity is set to reach up to 3.3 GW by 2030. 

Data centre campus to facilitate “next wave” of digital transformation

The DayOne Nongsa Digital Park Data Centre Campus is “designed to support the next wave of digital transformation”, said Jamie Khoo, chief executive of DayOne.

The campus located within Nongsa Digital Park will house Indonesia’s “most advanced AI-ready data centre”, she added.

Upon its completion by end-2025, it will have a combined IT load capacity of around 72 megawatts (MW). This will account for around 5 per cent of Indonesia’s projected data centre capacity of 1.41 GW by 2029, said DBS and UOB.  

Nongsa Digital Park to support digital connectivity with Singapore

The digital park in Batam aims to be a “digital bridge” connecting Singapore and Indonesia’s economies, they said. 

“Strengthened digital connectivity between Indonesia and Singapore better positions both markets to capture growing regional demand for computing power,” DBS’ Sinha added.

Given Indonesia’s ambition to become a regional digital hub, Harapman Kasan, wholesale banking director at UOB Indonesia, highlighted that Batam plays a “pivotal role” in serving as a key gateway to Singapore. 

The digital park will allow Singapore companies to leverage Indonesia’s infrastructure and digital talent pool as well as enable Indonesia to benefit from Singapore’s technological advancement and investment flows, the banks added.