Data Centers in Medan
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Medan – Strategic Digital Gateway for Northern Sumatra
Medan serves as the primary digital anchor for North Sumatra, providing essential edge connectivity to a massive regional population. For enterprises targeting trade routes near the Malacca Strait, positioning hardware here secures the low-latency access required to capture growth in one of Indonesia's fastest-expanding economic zones.
Medan: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Strong regional performance across Sumatra as of January 2026. |
| Direct Cloud On-Ramps | 0 – as of January 2026 | Jakarta and Singapore serve as the nearest major connectivity hubs. |
| Power Cost | IDR 1,114.74 – 1,444.70/kWh | Competitive industrial rates for Southeast Asia as of January 2026. |
| Disaster Risk | Moderate (4.5/10) | Seismic activity and flooding are primary concerns as of January 2026. |
| Tax Incentives | Yes | Concessions exist for centers in designated areas as of January 2026. |
| Sales Tax | 12% VAT | Standard national rate for digital services as of January 2026. |
Network & Connectivity Ecosystem
Medan acts as the connectivity gateway for the island of Sumatra, linking local users to the national backbone in Jakarta and international routes via Singapore.
Carrier Density & Carrier Neutrality: The market supports a functional ecosystem with ~10–15 carriers as of January 2026. Local facilities provide neutral environments where businesses interconnect with national telecommunication providers and regional internet service providers.
Direct Cloud On-Ramps: 0, enabling access to 0 cloud regions as of January 2026. Organizations requiring high-speed access to AWS, Google Cloud (GCP), or Microsoft Azure typically utilize private network extensions or high-capacity wavelengths to connect through major hubs in Jakarta or Singapore.
Internet Exchange Points (IXPs): Peering is largely managed through the Sumatra Internet Exchange or via private interconnects to the primary national exchanges in Jakarta as of January 2026. This structure ensures efficient local traffic routing while maintaining reliable access to the broader Indonesian internet.
Bare Metal: Compute requirements are supported by global providers such as Latitude.sh and Hivelocity as of January 2026. These options serve businesses requiring high-performance hardware without long-term equipment management.
Power Analysis
Power in Medan is supplied through a grid that is increasingly diversified but still relies on traditional generation methods.
Average Cost Of Power: Industrial electricity costs range between IDR 1,114.74 and IDR 1,444.70/kWh as of January 2026. These rates provide a predictable cost structure for large-scale data center operations and remain competitive within the Southeast Asian market.
Power Grid Reliability: The electrical grid in major industrial corridors is well-engineered and utilizes multi-substation support to ensure stability. While the national mix is approximately 81% fossil fuels, the remaining 19% comes from hydro and geothermal sources, providing a resilient energy foundation as of January 2026.
Market Access, Business & Tax Climate
Medan is the administrative and commercial heart of North Sumatra, making it a natural choice for digital infrastructure.
Proximity To Key Business Districts: Facilities are strategically placed near the Medan City Center and the Port of Belawan. This proximity is vital for logistics companies and financial institutions that require immediate access to their data processing environments.
Regional Market Reach: A presence in Medan allows businesses to serve the wider North Sumatra province and neighboring regions. Its location near the Malacca Strait also makes it a sensible staging point for regional digital services.
Tax Advantage For Data Centers: Operators benefit from specific financial concessions and regulatory relief that lower the total cost of entry. These incentives allow infrastructure providers to reinvest capital into local facility expansion instead of high overhead as of January 2026.
Natural Disaster Risk
The overall risk score for Medan is Moderate (4.5/10) as of January 2026. The risk profile is primarily shaped by the regional geography of Sumatra.
Natural Hazards
- Tsunami (9.3/10): High risk reflecting regional coastal exposure, though mitigated for facilities located further inland as of January 2026.
- Earthquake (8.9/10): High risk stemming from the city’s location within a seismically active zone as of January 2026.
- River Flood (8.4/10): High risk for low-lying areas during heavy monsoon seasons as of January 2026.
- Coastal Flood (8.1/10): High risk for facilities located near the Port of Belawan and coastal zones as of January 2026.
- Epidemic (7.4/10): Moderate risk reflecting regional health challenges as of January 2026.
Other natural hazards, such as tropical cyclones and droughts, are considered minor or are not listed as significant threats to infrastructure in this area as of January 2026.
