Indonesia Halts Singapore’s 640MW AI Data Center Project Over Permits

PURWAKARTA, WEST JAVA – Indonesia's West Java government has temporarily halted construction of a major artificial intelligence data center owned by Singapore-based BDx Data Centers, citing incomplete permits and an unfinished environmental assessment.

The CGK4 project in Jatiluhur, Purwakarta, has a planned capacity of 640 megawatts (MW) and is expected to become one of Indonesia's major AI infrastructure projects. BDx broke ground on the campus on September 22, 2026.

West Java Governor Dedi Mulyadi ordered construction to stop until the required permits are issued and the project's environmental impact assessment is completed.

“The project is being halted not because it violates environmental rules. It's being halted because the permits have not yet been issued,” Dedi said, according to Reuters.

West Java Communication and Information Agency head Adi Komar said the provincial government supports the investment but stressed that projects of such a large scale must comply with environmental and construction requirements. Building approval and environmental permitting fall under the authority of the Purwakarta regency government.

AI Data Centers Put Water Under the Spotlight

The CGK4 site is located around 5 kilometers from Jatiluhur Dam, an important water source in the region. The project has attracted attention over potential water use because data centers require cooling systems as well as large amounts of electricity.

BDx said the project has secured 845 MVA of grid capacity from Indonesia's state electricity company PLN. The planned campus will contain six buildings and is expected to be developed over approximately three years. The first 120MW facility is scheduled to begin operations in early 2027.

The dispute reflects a broader challenge emerging around the world: how to expand AI infrastructure without placing excessive pressure on electricity supplies, water resources, land and local communities.

Reuters reported that data centers are expected to require significantly more electricity and water by 2030 as demand for AI computing grows. Similar concerns have prompted restrictions or reviews of data-center projects in other parts of Southeast Asia.

Indonesia's AI Infrastructure Race

The temporary suspension comes as Indonesia seeks to expand its digital infrastructure and attract investment in AI and cloud computing.

Research and Markets, cited by Reuters, valued Indonesia's data-center market at approximately US$2.81 billion in 2025 and projected it could reach US$6.08 billion by 2031.

For Indonesia, the Jatiluhur case shows that the AI infrastructure race involves more than computing capacity. Water availability, electricity, environmental safeguards and regulatory compliance are becoming equally important.

For now, construction of CGK4 remains on hold while the project's outstanding requirements are being processed.