Green Power Meets Big Data: Why Pertamina Geothermal (PGEO) is Diving Into the Data Center Business

In a bold move that bridges the gap between renewable energy and the digital economy, PT Pertamina Geothermal Energy Tbk (PGEO) has officially announced its plans to expand into the data center industry. This isn't just a minor side project; the company is looking to provide a comprehensive suite of services, including data processing, storage, and management. Their vision extends to providing the full stack of computing infrastructure, hosting, and specialized support services like server operations and network management.

What makes this strategy particularly compelling is the synergy with PGEO’s core business. By utilizing the electricity generated directly from geothermal sources to power these data centers, the company is positioning itself at the forefront of an integrated green energy and digital infrastructure ecosystem. According to management in a recent disclosure to the Indonesia Stock Exchange (IDX) on April 21, 2026, this move is a strategic diversification designed to optimize the use of geothermal energy while creating a more sustainable business model.

Scaling for the AI and Cloud Era

The timing of this expansion isn't accidental. PGEO’s management recognizes that Indonesia’s data center market is undergoing a massive transformation. By 2025, the demand for data infrastructure is expected to skyrocket, driven by high cloud adoption, the exploding workload of Artificial Intelligence (AI), and supportive government regulations. Furthermore, Indonesia is rapidly cementing its status as a regional data hub, thanks to the development of subsea cable systems that boost international bandwidth and connectivity.

Interestingly, the company notes a significant shift in technical requirements. As of 2025, Tier III segments have dominated over 61.59% of the market share. Older Tier I and Tier II facilities are becoming increasingly irrelevant because they simply cannot offer the uptime, redundancy, and security levels required by today’s digital economy. With the expansion of digital services in banking, fintech, e-commerce, and government systems, customers are now demanding Tier III and Tier IV standards as a baseline.

A Market Poised for Massive Growth

The projections for the next few years are nothing short of staggering. Between 2024 and 2031, Indonesia’s colocation market—both retail and wholesale—is expected to see exponential growth. In 2025, retail colocation capacity is estimated at 388.11 MW. Fast forward to 2031, and that number is projected to climb to 1,623.91 MW. Wholesale colocation isn't far behind, with an expected capacity of 1,275.93 MW by the same year.

Much of this growth is being fueled by the digitalization of Small and Medium Enterprises (SMEs), startups, and cloud-native businesses. These entities are looking for hosting solutions that are not only scalable and cost-efficient but also flexible. This demand reflects in the revenue numbers as well: colocation revenue in Indonesia was recorded at USD 4,784.92 million in 2024 and is projected to rise to USD 5,890.44 million by 2025. For PGEO, this represents a vast, open market opportunity with long-term sustainability.

The Flagship Project: Kamojang Data Center

PGEO isn't just talking about plans; they have a specific roadmap. The company intends to build a data center facility in the Kamojang - Samarang Garut area, specifically in the Ibun District, Bandung Regency. The planned development will cover approximately 5,133 square meters. Crucially, this site will be powered by a dedicated Geothermal Power Plant (PLTP) with a 5 MW capacity, ensuring that the data center has a direct, clean, and reliable energy source.

To ensure top-tier connectivity, the location is already served by two major telecommunications networks: Telkom and PLN Icon Plus. While some data centers are tied to specific carriers, PGEO aims for a carrier-neutral approach, which is generally more attractive to corporate clients. To run this operation, the company expects to hire an additional 38 specialized staff members focused on day-to-day operations.

Financial Health and Strategic Impact

From a financial perspective, the move has been thoroughly vetted. An independent feasibility study has deemed the project viable across market, technical, operational, and financial dimensions. While the initial investment will increase fixed assets and cause a temporary dip in short-term cash, the long-term benefits are substantial. PGEO anticipates a steady stream of recurring income, which will improve overall profitability.

Key financial indicators look promising: the project has a Net Present Value (NPV) of Rp126.37 billion, an Internal Rate of Return (IRR) of 10.51%, and a Benefit-Cost Ratio (BCR) of 1.87x. Currently, PGEO holds total assets of approximately USD 3.03 billion, and this new venture is expected to grow that asset base significantly without overextending the company's liabilities.

As part of the wider Pertamina Group, PGEO won't be going at it alone. There is a strong possibility of collaboration with affiliated entities for energy supply, infrastructure development, Engineering, Procurement, and Construction (EPC) services, and IT support. By integrating these resources, PGEO is not just building a data center; it’s building a future-proof pillar for Indonesia’s digital sovereignty.