JOHOR BARU: Johor has set a national precedent by becoming the first Malaysian state to integrate wastewater recycling into Tier 4 data centre operations, marrying cutting-edge digital infrastructure with sustainable resource management.
Mentri Besar Datuk Onn Hafiz Ghazi highlighted that this breakthrough bolsters Johor’s position as the leading data centre hub in the country while supporting its long-term economic and environmental strategies.
"To date, more than 50 applications for the construction of data centres have been received, with 42 projects already approved as of the second quarter of 2025," he stated.
These projects represent RM164.45bil in total investments and have the potential to generate over 6,000 job opportunities for Malaysians, particularly Johoreans.
Onn Hafiz, who is also the Machap assemblyman, shared this during the Alternative Water Usage Recognition Ceremony for the Data Centre Industry on Monday (Aug 11).
He added that seven new applications involving water usage of up to 76 million litres per day are currently being reviewed by Johor Special Water (JSW) in collaboration with utility providers and the state government.
The data centre industry has become a key driver for the Johor-Singapore Special Economic Zone (JS-SEZ), the Johor Digital Plan, and the state’s broader economic transformation agenda towards a competitive, high-value ecosystem.
Rapid growth in the sector must be balanced with strategic and sustainable management of energy and water resources, Onn Hafiz emphasised.
"To ensure this, the Johor Data Centre Development Coordination Committee was set up, co-chaired by three state executive councillors, to oversee data centre projects through a transparent review process," he said.
The committee focuses on ensuring facilities adopt renewable energy sources and alternative water solutions to reduce pressure on the state’s potable water supply.
JSW, a subsidiary of Permodalan Darul Ta’zim Sdn Bhd, has partnered with national sewerage company Indah Water Konsortium (IWK) to supply alternative water sources for data centre cooling systems.
Water supply options include raw water, reclaimed (recycled) water, and desalinated water. Under a 2011 agreement, JSW was granted exclusive rights by IWK to carry out wastewater reclamation projects across Johor for industrial use.
Also at the event was Deputy Prime Minister Datuk Seri Fadillah Yusof who said that use of treated effluent as an alternative water source for data centre operations in Johor should be emulated by other states.
“I congratulate Mentri Besar Datuk Onn Hafiz Ghazi and the Johor government for prioritising alternative water and energy sources in developing data centres in the state. This is a step forward in ensuring environmental sustainability and resource security," he said.
As of June 30, JSW had received requests from data centre operators for a total of 136 million litres per day of alternative water supply.
On Monday, three agreements were formalised to enhance the integration of reclaimed water into the state’s data centre operations. The first agreement between IWK and JSW will channel treated effluent from sewage treatment plants across Johor into reclaimed water production facilities.
The second agreement, involving JSW, Bridge Data Centres (BDC), and Computility Technology (Malaysia) Sdn Bhd, covers the use of reclaimed water in cooling systems. BDC has been producing reclaimed water since June 9 at its Ulu Tiram plant, while Computility’s facility in Iskandar Puteri is scheduled to be operational by December.
The third agreement between JSW and DayOne Data Centres Sdn Bhd involves supplying raw water from the Tebrau River to a data centre in Kempas Tech Park, with operations expected to begin in November.
Onn Hafiz said the initiative will not only reduce reliance on treated water for industrial use but also reinforce Johor’s reputation as a green industry leader.
