Malaysia makes water availability a condition for data centre approvals
Electricity for data centres will carry no subsidy, while projects without access to surplus grid capacity will need off-grid arrangements.
Malaysian states lacking adequate water cannot accommodate data centres, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani told Parliament while concluding debate on the 2027 Supply bill.
Johari said federal authorities would consult each state before granting project approval. Available land alone would not qualify a project if the state could not provide enough water. He encouraged investors to bring in water-recycling technology and urged states to set water charges above those paid by ordinary users.
Power from the grid would depend on both surplus generating capacity and sufficient reserves, he said. Projects would need off-grid supplies where no surplus existed. Electricity charges would reflect world market prices, without subsidies.
Johari put the number of approved data centres at 117. He said 55 were operational, construction was under way on 19, and work had not begun on 16. The remaining 27 were at different development stages and would be powered through off-grid arrangements.
Completion of all 117 projects would bring their estimated power requirement to between 23,000 and 23,500 megawatts (MW), according to Johari.
Applications must pass through the Malaysian Investment Development Authority (Mida), which takes account of advice from the Data Centre Task Force (DCTF). Its membership spans three ministries: Investment, Trade and Industry; Digital; and Energy Transition and Water Transformation.
Responding to Datuk Seri Hasni Mohammad's question on responsibility for water and energy supplies, Johari also pointed to a possible role for Petroliam Nasional Bhd (Petronas). He said separately powered data centres could provide an outlet for natural gas sold at market prices without requiring long-term agreements.
