KUALA LUMPUR: Data centre operators in Malaysia will have to pay for electricity capacity they commit to but do not use, under a policy aimed at preventing power allocations from being tied up unnecessarily, the Dewan Rakyat was told.
“This is to ensure data centre investments benefit Malaysia beyond the use of its relatively cheap electricity and water.
“If you come to build a data centre and request 200 megawatts, but when the facility and power supply are ready you use only 100, we will charge you for the other 100,” said the Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani (pic) said during Question Time in the Dewan Rakyat on Thursday (Oct 15).
“If you do not pay, we tell you that you cannot operate,” he added.
Johari said the government wanted a fair arrangement in which both Malaysia and investors benefited, rather than allowing foreign companies to use the country merely as a low-cost base for data storage and computing services.
“We welcome them to come, but it is not about getting cheap energy from us,” he said.
He was responding to Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam), who said Malaysia must ensure data centre investments created wider benefits for local industries and workers.
“We do not want Malaysia to become merely a place where people rent space for data centres because our water and electricity are cheap.
“What measures would the Investment, Trade and Industry Ministry take to develop supporting industries and human capital alongside the expansion of data centres?” Wee asked.
Johari agreed that the country needed to capture more value from the investments, including by ensuring local companies, engineers, technicians and universities gained opportunities to participate in the sector.
He said the government was pushing for at least 30% local content in new data centre projects, including through local construction, engineering services and equipment procurement.
The government also wanted Malaysian universities and companies to gain access to computing capacity for research and development, as well as opportunities to develop expertise in cloud computing, artificial intelligence and cybersecurity.
Johari said Malaysia had 57 operational data centres requiring 6,237 megawatts (MW) of electricity, while another 60 facilities at various stages of approval or development could require a further 11,172MW.
He said data centre power requirements were being separated from electricity supply serving households and other industries to protect existing demand and reserve capacity.
On water consumption, Johari said state governments needed to assess their resources carefully before approving projects, while data centre operators were required to use water-recycling technology.
Earlier, responding to Rodziah Ismail (PH-Ampang), Johari said Bank Negara Malaysia estimates showed data centres’ direct contribution to gross domestic product had risen from RM900mil in 2021 to RM14.1bil in 2025.
“RM385.7bil in approved data centre investments since 2021 comprised RM114bil in domestic investment and RM271bil in foreign investment, although not all projects had been fully realised,” he said.
