Data Centers in Palembang

Palembang – Strategic Hub for Sumatra's Digital Growth

Executive Summary

Palembang is an emerging edge data center market in Indonesia, ideal for organizations aiming to serve the vast population of Sumatra with lower latency. For businesses in logistics, agriculture, and regional commerce, deploying infrastructure here provides a significant performance advantage over backhauling traffic to Jakarta. This strategic location ensures faster application response times and a better user experience for customers across the island.

Palembang: At A Glance

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: As of September 2025, Palembang's data centers offer access to a growing number of national and regional carriers. Carrier-neutral facilities provide the necessary options for building resilient, multi-homed network architectures.

Direct Cloud On-Ramps: There are no direct cloud on-ramps within Palembang as of September 2025. Businesses require dedicated network connections, such as PNI or wavelength services, to connect to cloud provider fabrics in the nearest major hub, Jakarta. This allows for secure, high-performance hybrid cloud deployments.

Internet Exchange Points (IXPs): Public peering is limited within Palembang itself. Most network traffic is exchanged via private peering arrangements or is routed through Indonesia's primary internet exchange points located in Jakarta.

Bare Metal: Bare metal server solutions are available, offering dedicated, high-performance computing resources. Providers like Hivelocity can deliver services to the region, enabling workloads that demand single-tenant hardware without the overhead of virtualization.

Power Analysis

Average Cost Of Power: Industrial electricity rates in Palembang typically range from IDR 1,125.00 - 1,775.00/kWh ($0.07 - $0.11/kWh) as of September 2025. This competitive pricing structure helps organizations manage operational expenditures for high-density deployments.

Power Grid Reliability: The power grid supporting Palembang's primary commercial zones is stable and suitable for data center operations. Local facilities leverage this with standard N+1 or 2N redundancy, including UPS systems and backup generators, to ensure high levels of uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers in Palembang are situated to serve the city's main economic zones and industrial parks. This proximity is critical for local manufacturing, trade, and agricultural enterprises that require low-latency processing and data access.

Regional Market Reach: Palembang provides a strategic digital gateway to the entire island of Sumatra, Indonesia's second-most populous region. Deploying here significantly improves service delivery for millions of end-users compared to hosting infrastructure exclusively in Java.

Tax Advantage For Data Centers: Indonesia offers tax incentives for data centers located within designated Special Economic Zones (SEZs). These programs can provide concessions or exemptions on certain taxes, effectively lowering the total cost of ownership for qualifying colocation investments.

Natural Disaster Risk

Palembang has a moderate natural disaster risk profile, with an INFORM Risk score of 4.5 out of 10 as of September 2025. While the overall risk is manageable, operators must engineer facilities to withstand specific regional threats.

The most significant natural hazards for the area include:

• Tsunami: High regional risk (9.3/10)
• Earthquake: High risk (8.9/10)
• River Flood: High risk (8.4/10)
• Coastal Flood: High regional risk (8.1/10)
• Drought: Moderate risk (3.4/10)