Govt to make technology transfer and unsubsidised power key conditions for data centre investors
THE Government will push foreign data centre investors to share technology with local universities and bear the full cost of their electricity needs, as the government seeks to ensure the sector delivers lasting benefits to the country rather than pr...
The Malaysian government has announced that foreign data centre operators will be required to share their technological knowledge with local universities and to bear the full cost of their electricity needs. This move aims to ensure that the sector provides enduring benefits to the nation rather than solely serving overseas markets.
Government Minister, Datuk Seri Johari Abdul Ghani, stated that investors should collaborate with Malaysian institutions to foster the growth of local expertise while keeping data centre power supplies separate from those serving households and other industries to prevent cross-subsidisation. He clarified that Malaysia does not wish to have data centres built without considering the country's needs, prioritising foreign customers instead.
Responding to a question from opposition member Rodziah Ismail, Johari addressed how the government calculates the net value generated by data centres considering electricity, water, land, infrastructure costs, incentives, employment, local content, and the opportunity cost of national resources. Since 2021, RM385.7 billion has been invested in data centres, with the participation of major technology firms such as Amazon Web Services, Microsoft, Google, Oracle, ByteDance, and Alibaba, which contribute expertise in cloud computing, artificial intelligence, generative AI, data storage, cybersecurity, and e-commerce.
To address concerns over electricity costs, Johari modified the policy to differentiate data centres' power requirements from those supplied by Tenaga Nasional Bhd to households and unrelated industries. This change aims to prevent data centres from receiving subsidies and from placing undue pressure on electricity capacity reserved for existing users.
TNB's capacity is 28,000 megawatts, whilst industrial demand ranges between 22,000MW and 26,000MW, leaving a reserve margin for other economic activities. Market-based pricing for electricity, including gas used for power generation, must be applied to data centres to avoid any subsidy element. The government insists that these conditions be negotiated during investor applications; otherwise, further discussions will not take place.
Written by urgent.news from The Vibes's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
