A Digital Boom in a Thirsty City

While residents cope with water rationing, new digital facilities are preparing to draw millions of liters more. NeutraDC-Nxera’s 56-megawatt facility alone could consume around 3 million liters of water a day — roughly the equivalent of an Olympic-sized swimming pool — just to stay operational. That figure is nearly half of the Kabil Industrial Park’s current daily supply, which provides about 7.4 million liters of water daily to 45 companies spread across its 539 hectares.

“We’ve told Kabil our future needs,” Indrama of NeutraDC-Nxera, said.

The company insists its facility will be water-efficient. The third and fourth floors will use fan wall air cooling, while the second floor will employ direct-to-chip technology, circulating coolant directly to server processors to minimize evaporation loss.

Still, the numbers are staggering. Data from BP Batam show that by 2032, the nine planned data centers in Nongsa Digital Park — with a combined IT load capacity of 285 megawatts — will require around 29 million liters of water per day. Add another 3 million liters for NeutraDC-Nxera’s facility, and together they would consume roughly 8.4 percent of Batam’s current total water supply.

City Living on rain

Batam’s vulnerability is not new. In 2020, the island endured months without rain. Reservoirs shrank, taps ran dry, and residents queued for water. The main reservoir — Duriangkang, which supplies 80 percent of Batam’s water — dropped 2.7 meters below its spillway. BP Batam even turned to cloud seeding to induce rain.

It was déja vu from 2015, when a similar drought crippled the city and residents were forced to buy drinking water just to bathe and even to collect it from puddles on the ground. “Batam depends entirely on its reservoirs,” said Hendrik Hermawan, Founder of Akar Bhumi, a local environmental NGO.

“But many of their catchment areas are already damaged.”

Six reservoirs currently supply about 382 million liters of water daily. For now, that’s just enough. But deforestation, pollution, and unregulated land use threaten their sustainability.
Around Tembesi Reservoir, residents have built fish cages and set up small farms—activities that are technically banned within 500 meters of any reservoir.

“Runoff from livestock waste and pesticides is contaminating the reservoirs. We’re working to fix this,” said Ariastuty.

Batam’s history of water management has long been troubled. The city lost one of its vital water sources after years of land squatting around the Baloi Dam. Built in 1977, the reservoir endured decades of informal settlements that severely contaminated its water with heavy metals, like cadmium, chromium, and lead, as well as chemical detergents. By 2012, authorities had no choice but to shut down the dam. Since then, the once-pristine reservoir has deteriorated into what locals grimly describe as a giant septic tank.

Hendrik Hermawan of Akar Bhumi called the Baloi Reservoir case a “tragedy.” He urged authorities to pay closer attention to the health of the remaining reservoir ecosystems to prevent history from repeating itself.

Ariastuty, on the other hand, remains hopeful about the future of the Baloi Dam. She acknowledges that authorities would need to displace thousands of people living around the reservoir to make it operational again. Batam needs every drop of water it can get and the Baloi Dam is no exception.

“We haven’t lost hope. We’ll figure it out,” she insisted.

Batam, however, has an infamous history of relocating its inhabitants for infrastructure projects. On September 7, 2023, a clash erupted between thousands of armed personnel—including military forces and police—and residents of Rempang, an island under Batam’s administration. The tragedy was triggered by the government’s plan to build an industrial zone, including a solar panel factory, which would displace thousands of Rempang residents.

Hermawan of Akar Bhumi described the incident as one of the darkest human rights records in Batam. He warned that relocating people living around Baloi Dam would pose a major challenge, as many have lived there for years.

“Now thousands of people live around Baloi Dam. How will BP Batam relocate them?” he said.

Singapore’s satellite city

Amid the surge of digital infrastructure investment, Batam is grappling with a major water management challenge. According to Sudra Irawan of the Batam Polytechnic, beyond pollution and contamination, the city’s growing population and expanding industries have also driven up water demand. Today, Batam is home to around 1.26 million people — a number projected to keep rising, fueled by both high birth rates and migration.

Batam is one of Indonesia’s most unique cities — a place built almost entirely from scratch. Once blanketed by dense forest, Batam was virtually an unpopulated island before the 1970s, home to only a handful of fishermen living along its coastal areas. Under the directive of President Soeharto’s military regime, the island was cleared of forests in the 1970s to make way for industrial development.

Once the island was cleared and began to grow as an industrial city, it became clear that Batam needed a stable water supply. The government then initiated the construction of several reservoirs to meet the city’s increasing water demand. The Baloi Dam was the first to become operational in 1978, followed by the Sei Harapan Dam in 1979, with additional reservoirs built in the subsequent years.

Batam soon transformed into a thriving industrial hub and became a key part of the SIJORI Growth Triangle, a subregional economic cooperation linking Singapore, Johor (Malaysia), and Riau (Indonesia). Over the decades, this partnership turned Batam into an industrial satellite city for Singapore. The island hosts factories, shipyards, and electronics assembly lines. Now, in the digital era, the same logic drives the data center boom.

Singapore, for its part, imposed a temporary pause on new data center developments in 2019, facing both energy and land constraints. The moratorium was lifted in 2022, but only with the introduction of strict sustainability and efficiency requirements for future projects. Since then, many investors have looked across the strait to Johor and Batam, where land and resources remain more accessible for data center expansion with minimal regard for this infrastructure’s other primary need: water.

Johor has been a step ahead of Batam in attracting data center investors. According to a Malaysiakini report, the Malaysian state has drawn 72 data center projects, with at least 13 already operational and a projected total capacity of 2.6 gigawatts by 2027. The boom has raised concerns over Johor’s water and energy supply, while across the strait, Batam is eager to seize the spillover opportunity from the growing regional demand for data infrastructure.

Nicholas Toh, Managing Director and Head of Data Centre Platform, Asia at Gaw Capital Partners — the firm behind Golden Digital Gateway’s 5.2-MW facility in Nongsa — said Batam’s tax incentives under the Special Economic Zone (SEZ) give it a competitive edge over other emerging data center locations.

He added that the facility’s cooling system design prioritizes air-based methods over water-intensive systems. The infrastructure is also built with flexibility for future upgrades, as AI workloads may eventually require liquid cooling technology.

Still, the overall water demand from large-scale data centers — even those using more efficient systems — remains a pressing issue on the island, where most reservoirs depend entirely on rainfall. By 2032, the 5.2-MW Golden Digital Gateway facility is projected to require around 881,000 liters of water per day.

Nevertheless, the growing demand for water from data centers has raised concerns among residents. Ishlahudin (30), who has lived in Batam for most of his life, warned about the city’s vulnerability to dry spells such as those that occurred in 2015 and 2025. He fears that the water needs of data centers will be prioritized over those of citizens, especially during prolonged droughts.

BP Batam is exploring several solutions to address this issue. Irfan Syakir explained that, specifically in the Nongsa Special Economic Zone (SEZ), the authority plans to build a water treatment facility with a capacity of 30 million liters per day to meet the needs of the digital industry. “That’s the advantage of investing in the SEZ,” said Irfan Syakir. “We are fully committed to supporting the industry.”

Meanwhile, Ariastuty also encouraged data center companies to help find solutions for water supply, one of which is by considering seawater desalination technology. “There’s already a company in Batam that produces it,” said Ariastuty.

She acknowledged, however, that the technology still faces challenges related to investment and cost. For comparison, the price of industrial water in Batam is around Rp12,000 (US$0.72) per cubic meter, while desalinated seawater can cost between Rp28,000 (US$1.69) and Rp36,000 (US$2.17) per cubic meter. In addition, the initial investment remains high. According to BP Batam’s calculations, a facility with a capacity of 300 cubic meters could cost up to Rp300 billion (approximately US$18.1 million).

“Desalinated water is still expensive,” said Indrama from NeutraDC-Nxera. “In the end, it will depend on client demand,” he added.

As data center demand continues to grow across the region, Batam’s strategic location — coupled with its various incentives — is likely to make the island one of investors’ favorite destinations. Yet, its vulnerability remains.

This report is part of “Dark Side of The Boom”, a collaborative project involving 14 media outlets across Asia, initiated by Internews’ Earth Journalism Network.