Data Centers in Palembang

Palembang – Strategic Hub for Sumatra

Palembang is an emerging digital market serving the resource-rich island of Sumatra. For businesses requiring low-latency access to local industries like agriculture, mining, and manufacturing, Palembang offers a cost-effective alternative to Jakarta for deploying infrastructure closer to the end-user. This proximity reduces latency and improves application performance for Sumatra's growing economy.

Palembang: At A Glance

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality Carrier availability in Palembang is developing, with connectivity primarily provided by major national Indonesian operators. The market supports carrier-neutral facilities, allowing interconnection between a focused group of service providers as of September 2025.

Direct Cloud On-Ramps There are no direct cloud on-ramps within Palembang as of September 2025. Businesses require private network connections or IP transit to the nearest primary cloud hub in Jakarta to connect to major cloud providers.

Internet Exchange Points (IXPs) Public peering is limited within Palembang. Most traffic exchange occurs privately or is routed through major exchange points in Jakarta, such as the Indonesia Internet Exchange (IIX).

Bare Metal Bare metal server options are available through providers that service emerging Indonesian markets. Companies like Hivelocity can offer dedicated server solutions to support workloads requiring direct hardware access.

Power Analysis

Average Cost Of Power Industrial electricity rates are estimated to be between IDR 1,650.00 and IDR 1,800.00 per kWh as of September 2025. This pricing structure makes it a competitive location for compute infrastructure within the region. The grid is heavily reliant on fossil fuels, with a growing but small renewables component.

Power Grid Reliability The power grid in key commercial and industrial areas of Palembang is reliable for business operations. Data centers in the region utilize standard N+1 or 2N redundancy with backup generators and UPS systems to ensure uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts Data centers in Palembang are positioned to serve the city's commercial centers and the vital industrial sectors across South Sumatra. This includes agriculture, coal mining, and manufacturing, providing low-latency infrastructure for local operations.

Regional Market Reach Palembang serves as a strategic digital gateway to the entire island of Sumatra, with a population of over 60 million. Its location on the Musi River provides logistical advantages for reaching businesses throughout this resource-rich region.

Tax Advantage For Data Centers Indonesia offers tax incentives for data center investments, particularly within designated Special Economic Zones (SEZs). These programs can provide significant relief from certain taxes and import duties, reducing the total cost of ownership for operators and their clients.

Natural Disaster Risk

Palembang has a moderate overall disaster risk profile, with a score of 4.5 out of 10 as of September 2025. The primary risks are tied to its geography and Indonesia's seismic activity.

Key natural hazards include:

• Earthquake: High risk (8.9/10) due to proximity to regional fault lines.
• River Flood: High risk (8.4/10) associated with the Musi River and local topography.
• Coastal Flood: A significant regional risk (8.1/10) that can have secondary impacts on logistics, though Palembang is an inland river port.
• Epidemic: Moderate risk (7.4/10).