KUALA LUMPUR: The government has tightened conditions for data centres, with operators now required to pay the market electricity tariff rate and the full cost of their reserved power capacity, even if they use less.
Investment, trade and industry minister Johari Ghani said electricity tariffs for data centres had been separated from those imposed on other consumers to ensure that the sector no longer benefits from subsidies meant for households and other industries.
"Previously, if investors requested 200 megawatts (MW), we would provide it, but they might only use 100MW (and pay for that amount).
"Now, even if they use only 100MW, they must still pay for the full 200MW," he told the Dewan Rakyat in reply to a question from Rodziah Ismail (PH-Ampang).
Johari said investors would also be required to bear the cost of upgrading Tenaga Nasional Bhd's (TNB) electricity transmission network and adopt water recycling technology to reduce pressure on state water supplies.
He said the Data Centre Task Force also required investors to source at least 3% of their services locally, including consultancy, contracting, engineering and legal services.
This requirement is aimed at ensuring that local businesses benefit from the growing number of data centre investments, he added.
"We want to tell the world that we welcome their investments, but it is no longer about cheap energy. The country and its people must benefit from these investments."
Johari said data centres' contribution to the economy rose sharply from RM900 million in 2021 to RM14.1 billion this year.
There are 57 data centres currently operating in Malaysia, with a combined electricity supply of 6,237MW from TNB, while another 60 projects requiring 11,172MW are at various stages of approval and construction.
Johari said total reported investments in the sector had reached RM385.7 billion, with RM271 billion coming from foreign investors and RM114 billion from domestic investors.
Major technology companies such as Amazon Web Services, Microsoft, Google and Alibaba are also being encouraged to provide local universities and businesses with access to computing resources, and to share artificial intelligence and cloud computing technologies.
Johari said these efforts were crucial to developing local expertise and building a skilled workforce over the long term.