The data centre industry in Malaysia is continuing to grow, with several projects set in motion this year. According to the Digital Ministry, a total of 27 data centre projects have been approved by the Data Centre Task Force (DCTF) as of July 2026. These projects involve an estimated RM225.97 billion in investments and are spread across three states in the nation.
It probably shouldn’t come as a surprise that the lion’s share of the projects is concentrated in Johor, as the region is shaping up to be the country’s data centre hub. In a written parliamentary reply, the ministry disclosed that out of the 27 centres, 16 are in the state. Meanwhile, ten projects are situated in Selangor, and one has been approved in Negeri Sembilan. Other than that, the ministry revealed that one of the data centres is already in operation, while the remaining are still under construction.
Economic Opportunities Ahead
As for the potential economic benefits, the ministry explained that these projects are expected to create 4,053 jobs. These include 3,523 high-skilled positions in fields like electrical and mechanical engineering, networking, and cybersecurity. Additionally, there will be job opportunities in the area of data centre operations and maintenance.
The Digital Ministry went on to note that 89.21% of the high-skilled positions are expected to be filled by Malaysians. It added that projects approved by the DCTF are subject to a minimum local content requirement of 30%. The Malaysian Investment Development Authority (MIDA) will also be monitoring compliance through reports submitted every six months. Meanwhile, to strengthen local expertise, TalentCorp Malaysia is developing a data centre facilities management programme, which is aimed at training participants in skills relating to data centre operations and maintenance.
Impact On Local Communities
Although the economic prospects may sound promising, one cannot ignore the other effects of data centre development, particularly in terms of the environment. Issues like pollution as well as energy and water consumption have been brought up in the past. Back in July, a proposed data centre project in Kota Damansara drew scrutiny from nearby residents, who highlighted concerns regarding noise from round-the-clock operations, heat generated by the facility, and increased traffic, among other things. Following the dispute, the project in question was put on hold.
Going further back, Malaysia saw its first public protest against data centres in Johor, which involved a facility in the Gelang Patah district. Residents drew attention to multiple issues, including dust pollution, potential water supply issues, and construction-related disturbances. In response, the developer asserted that it complies with regulatory requirements.
Addressing Energy Consumption Concerns
Meanwhile, Energy Transition and Water Transformation Minister Datuk Seri Fadillah Yusof has gone on the record to highlight the increasing electricity demand in the country. Given the current trajectory, data centres are projected to consume about 31% of Malaysia’s electricity supply by 2035. The mounting strain on the energy supply could lead to higher costs, putting pressure on domestic consumers. As it stands, users are already facing higher bills due to the current haze and weather conditions. A temporary bill relief was announced last month to address the issue.
With all this in mind, the minister recently revealed that the government is looking into a “user-pays” electricity pricing system for large consumers. Data centres will naturally fall under this category, along with energy-intensive industries. This move is aimed at shielding households from rising electricity costs while also ensuring businesses bear a fairer share of supply costs. That said, details on rates, consumption thresholds, and implementation timelines remain under wraps at the moment. It’s also unclear how the proposed approach will affect the existing tariff categories.
(Source: The Edge [1], [2])
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