KUALA LUMPUR: Malaysia will not allow foreign data centre operators to exploit its electricity and water resources without delivering meaningful benefits to the country, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani told the Dewan Rakyat today.
He said Malaysia welcomed international technology investments but would insist that operators contribute to the domestic economy, develop local talent and bear the costs associated with their substantial energy requirements.
“We want to tell the whole world that we welcome them to come, but they cannot expect to get cheap energy from us.
“We want both the country and the investors to benefit. If investors cannot benefit, they will not come,” he said.
Johari said Malaysia currently had 57 data centres with electricity requirements totalling about 6,237 megawatts (MW), while another 60 projects at various stages of approval and development would require an additional 11,172MW.
Together, the 117 facilities represent potential electricity requirements of about 17,409MW, highlighting the growing pressure the industry could place on the country’s energy infrastructure.
He said the government was taking steps to ensure the expansion of data centres would not compromise electricity supplies for households and existing industries.
Johari explained that electricity capacity allocated to data centre operators would be managed separately from supplies reserved for domestic and other industrial consumers, with operators expected to bear their own costs without subsidies.
He also highlighted existing arrangements under which operators reserving electricity capacity would be charged based on their committed allocation, even if their actual consumption was lower.
For example, he said an operator securing 200MW but using only 100MW would still be treated as having utilised its full allocation.
“If they do not pay, we tell them they cannot operate,” he said.
Johari also cautioned state governments against approving data centre projects without adequately considering local water availability.
He said some states were eager to attract investments without fully assessing whether their water resources could sustain the additional demand.
Water recycling technology was therefore being required to ease pressure on existing supplies.
Johari said Malaysia wanted data centre investments to benefit local businesses and workers rather than simply provide foreign operators with access to cheap resources.
He said the industry contributed RM14.1 billion to the country’s gross domestic product in 2025, up from RM900 million in 2021, while reported investments totalled RM385.7 billion, much of which had yet to be fully realised.
He stressed that the long-term goal was to develop Malaysian expertise in artificial intelligence, cloud computing and other advanced technologies.