Indonesia data centres face anger over water shortages

Residents in Batam, Indonesia, are protesting against data centres as water shortages disrupt daily life in communities near a growing technology hub built to serve demand for artificial intelligence and online services.

The local water utility operator Air Batam Hilir said the area had suffered a long drought caused by low rainfall, while a strong El Nino cycle worsened dry weather. Spokesman Ginda Alamsyah said the nearby Nongsa Reservoir ran very low and supply systems were further disrupted by an electrical fault.

Some residents believe the shortages are linked to the construction of data centres at Nongsa Digital Park, a special economic zone that hosts technology facilities. At the worst point, dozens of residents staged spontaneous protests outside the park.

An industry source said the tech park receives water from Duriangkang Reservoir, not the nearby Nongsa Reservoir. Authorities in late September told developers they must build seawater desalination plants for cooling to avoid straining local resources.

Companies behind operational or planned data centres at Nongsa Digital Park include Singapore-headquartered BW Digital, DayOne and Princeton Digital Group. Hong Kong-based Gaw Capital Partners said it was aware of residents' distress over water shortages and said its facilities must use efficient designs, renewable energy sourcing and closed-loop water systems that reuse water.

Residents described being unable to cook, shower normally or run small businesses that depend on water. The government has distributed water from tanks, but one resident said the water was smelly and yellowish.

Local media reported that Batam mayor and BP Batam head Amsakar Achmad said in October that recent disruption to water distribution was not caused by data centres, AI or investors in the sector, but by weather and climate factors.

The concerns reflect wider pressure from a data centre boom in Southeast Asia. A KPMG report projected the region's data centre capacity would triple from 2025 levels by 2030, driven by a tenfold surge in AI use.

Malaysia's Johor region has also become a major emerging AI infrastructure cluster. Researcher James Chai said Johor's data centre capacity had grown from 10 megawatts half a decade ago to 2.1 gigawatts today. Malaysia's government said in July that it would approve data centre projects only after ensuring enough energy and water capacity.