Blended finance drives Indonesia’s AI investment strategy

Indonesia is promoting blended finance as a key mechanism to meet the growing investment needs of AI and digital infrastructure. By combining public and private funding, the government aims to accelerate the development of scalable digital systems while aligning investments with sustainability goals and local capacity-building.

The rapid global expansion of AI is driving a sharp rise in demand for computing power and data centres. The government views this trend as both a strategic economic opportunity and a challenge that requires sound financial governance and well-designed policies to ensure long-term national benefits.

International financial institutions and global investors are increasingly supportive of public–private financing models. Such partnerships are seen as essential for mobilising large-scale, long-term capital and supporting the sustainable development of AI-related infrastructure in developing economies.

To attract sustained investment, the government is improving the overall investment climate through regulatory simplification, licensing reforms, integration of the Online Single Submission system, and incentives such as tax allowances and tax holidays. These measures are intended to support advanced technology sectors that require significant and continuous capital outlays.

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