Malaysia's Data Centre Boom Faces Water and Power Questions
Monday, 2026/07/27215 words3 minutes324 reads
Malaysia has become Southeast Asia's fastest-growing hub for data centres, overtaking Singapore. Johor state, in the south of the country, is leading this expansion with large facilities that support cloud computing and artificial intelligence.
However, the rapid construction has raised concerns among residents and local officials. According to Malaysia's central bank, a 50-megawatt data centre consumes as much water as approximately 2,200 households per day and as much electricity as about 22,000 households. People living near planned complexes in southern Johor have expressed worries about water supplies, rising electricity prices, construction dust, and environmental damage to nearby green hills.
The government and industry are responding to these concerns. New projects in Johor must now demonstrate how they will obtain electricity, with renewable power becoming increasingly important for approval. The state banned two particularly water-intensive categories of data centres last year, which can require up to 50 million litres of water daily. Some operators are adopting innovative solutions, such as using treated wastewater instead of drinking water, implementing closed-circuit cooling systems, and relying on solar energy for more than half of their power needs.
Experts emphasize that while data centres can bring economic benefits and support digital services, their growth must be efficient, transparent, and sustainable to ensure local communities do not bear an unfair burden.
