KUALA LUMPUR: Malaysian sovereign wealth fund Khazanah Nasional Bhd’s infrastructure arm UEM Group Bhd plans to use its vast land holdings to supply clean energy and industrial land to accommodate power-hungry data centres in the southern state of Johor, says UEM managing director Datuk Amran Hafiz Affifudin.
Johor, where a new special economic zone is being jointly developed with neighbouring city-state Singapore, garnered RM164.45bil in data centre investments as of the second quarter.
The state is expected to host 60% of the Malaysia’s data centres by 2030.
That bodes well for UEM, whose property development subsidiary UEM Sunrise Bhd
is one of the biggest landowners there, with close to 4,600 acres.
Sunrise is currently firming up plans for the 40-acre renewable energy-powered Gerbang Nusajaya Industrial Park in the state, Amran said during an interview in Kuala Lumpur on Tuesday.
Its green-energy unit UEM Lestra Bhd is also set to begin construction on a one gigawatt hybrid solar plant backed by investors including units of I Squared Capital Advisors and Macquarie Group.
The first phase of the plant, encompassing 500 megawatt is to be built at a cost of RM2.5bil, Lestra said earlier this year.
UEM is exploring investing in water treatment for industrial parks as well, which is crucial for data centres’ cooling needs.
“This goes hand-in-hand with supplying energy to industrial parks,” Amran said.
“Even if you don’t include data centres, there is a huge need for water and power just for industrial needs.”
Malaysia is one of the three leading growth markets in Asia and the region’s data centre build-out will materially lift power demand through 2028, according to BMI, a Fitch Solutions company, in an industry outlook report on Wednesday.
Still, the pace of expansion is placing significant pressure on the country’s land and power resources, including the grid.
“Meeting this new demand with clean power becomes even more challenging, but increasingly important as renewable-matching commitments become central to data centre operators’ business models,” BMI said.
The Malaysian conglomerate, which has primarily been linked to property and road infrastructure development, is now also focusing on green energy and sustainability endeavours for future growth.
Last year Lestra purchased a majority stake in Malaysia’s only independent power utility firm Nur Power for an undisclosed sum and committed RM1.5bil to decarbonise industrial parks across the country through next year.
Lestra is now providing biogas power to Kulim Hi-Tech Park in Kedah, where semiconductor and electronics components companies such as Infineon Technologies AG and AT&S have operations. — Bloomberg
