Govt holds off on new data centre applications until 117 approved projects delivered

The Malaysian government has decided to postpone reviewing 24 new data centre applications while prioritising the completion of 117 previously approved projects, stated Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani. The ministry will evaluate electricity availability after the 117 projects are finished, and consider renewable energy, storage and emerging technologies if additional capacity is required.

When concluding the 2027 Supply Bill in the Dewan Rakyat, Johari addressed concerns raised by Hassan Abdul Karim (PH-Pasir Gudang) regarding potential conflicts of interest involving a water supply company in Johor with significant data centre investments in the state. The government first checks land availability and water supply with state authorities before considering electricity requirements for a proposed data centre, Johari explained.

Approving projects without adequate water supply could lead to issues, as water management is the responsibility of state governments.

The Malaysian Investment Development Authority (Mida) now collaborates with state governments to ensure sufficient water availability for data centres, Johari added. If specific areas in Johor experience water shortages, the ministry will seek explanations from water suppliers. Water disruptions typically last about two days when caused by burst pipes, and a prolonged absence of water (two to three weeks) indicates an inaccurate water calculation when proposing a data centre, he stated.