Govt puts 24 data centre applications on hold pending water, power checks

The Malaysian government has put 24 new data centre applications on hold pending assessments of water and electricity availability. Investment, trade, and industry minister Johari Ghani emphasized the need for careful selection when approving new data centre projects. The government prioritized completing the 117 previously approved data centres before allowing more to proceed.

Developers must first confirm water availability with state governments, as the federal government does not regulate state water supplies. Data centres require substantial water resources, and Johari suggested that states charge operators higher water tariffs than ordinary consumers. The government also encouraged the use of water-recycling technology and renewable energy, battery storage, and off-grid generation where grid capacity is insufficient.

The government would examine investors' financial strength and their ability to meet electricity supply agreements, in which operators pay for full contracted electricity capacity, even if they consume less.