27 Data Centre Projects Worth RM225.97 Billion Approved In Malaysia

The data centre industry in Malaysia is experiencing growth, with 27 projects approved by the Data Centre Task Force (DCTF) this year, valued at an estimated RM225.97 billion. These projects are spread across Johor, Selangor, and Negeri Sembilan, with 16 projects in Johor alone making it the leading state for data centre development. Out of the 27 approved projects, one is already operational, while the rest are still under construction.

The approval of these projects is expected to create 4,053 jobs, with 3,523 being high-skilled positions in electrical and mechanical engineering, networking, and cybersecurity. The Digital Ministry announced that 89.21% of these high-skilled positions are expected to be filled by Malaysians, and projects approved by the DCTF must adhere to a 30% minimum local content requirement.

The expansion of data centres has raised concerns about environmental impacts, such as pollution, energy consumption, and water usage. In July, a proposed data centre in Kota Damansara faced scrutiny from nearby residents due to noise, heat, and increased traffic, leading to its temporary suspension. Earlier, a public protest in Johor highlighted issues like dust pollution, water supply concerns, and construction disturbances. In response, the developer assured compliance with regulatory requirements.

Malaysia's energy consumption is projected to increase significantly, with data centres expected to consume about 31% of the country's electricity by 2035. This rise in demand could lead to higher costs for domestic consumers, already facing elevated bills due to haze and weather conditions. The government has proposed a "user-pays" electricity pricing system for large consumers, including data centres and energy-intensive industries, to alleviate the burden on households.

However, the specifics of the proposed system and its potential impact on existing tariff categories remain undisclosed.