KUALA LUMPUR, Nov — Johor has rejected nearly 30 per cent of data centre applications over five months to ensure sustainable practices and resource conservation, said a state official.
The state government established a vetting committee in June 2024, pre-empting concerns about the strain on water and electricity supplies from rapid industry growth.
According to The Straits Times, committee vice-chairman Lee Ting Han said it has denied four out of 14 applications from overseas operators as these did not meet sustainability and infrastructure requirements.
“Some applications were rejected because operators chose locations lacking adequate utilities infrastructure, which could risk straining water supplies for the local community,” he was quoted as saying.
Johor’s data centre capacity has surged to 1.3GW since 2021, with projections to double by 2027, highlighting the state's leadership in Southeast Asia's data hub market.
Each GW of power would power more than a million homes for an entire year, based on the global average in energy consumption.
Malaysia’s guidelines for approving data centres now emphasise renewable energy use, skilled local employment, and reduced water and energy consumption.
Prime Minister Datuk Seri Anwar Ibrahim previously cautioned against hastily supporting data centres that do not create high-income jobs or share knowledge with Malaysians.
The Ministry of Investment, Trade, and Industry is finalising national sustainable guidelines, set to be announced by late 2024, focusing on energy efficiency and minimal environmental impact.
Johor is also pursuing competitive salaries, with starting pay for skilled graduates expected to exceed industry norms, attracting local talent despite competition from Singapore.
