Govt to ensure data centres don’t affect power supply to industries

The government will ensure that the development of data centres does not affect electricity supply to existing industries, investment, trade and industry minister Johari Ghani said today.

He said data centres were important infrastructure for supporting the adoption of emerging technologies, but their development must not disrupt the energy needs of existing sectors.

“We will not interfere with existing industries as they are the backbone of our economy,” he told reporters after officiating the Amazon Web Services Cloud and AI Day programme here.

“However, we must also involve ourselves in data centres, as they represent vital future technology for various industrial activities.

“(This includes) manufacturing, which is increasingly adopting advanced technologies.”

Johari said Malaysia had approved 117 data centres with a combined maximum energy demand of approximately 23,500 megawatts, with 55 data centres already operational.

He said the government wanted to ensure that data centre investments not only benefit foreign investors but also create opportunities for local companies to participate in the supply chain.

Johari said data centre projects were subject to a minimum 30% local content requirement, covering the use of Malaysian consultants, contractors, engineers and procurement managers.

On financing, he said the government encouraged foreign investors to bring in capital to develop the facilities.

This would allow investors to bear the cost of developing data centres, while Malaysia benefits from the infrastructure and economic opportunities created, he said.

Johari said Malaysia also has the capacity to support data centre development through its energy resources, including natural gas, and the expansion of renewable energy sources.

He said such infrastructure was important to ensure that Malaysia can adopt new technologies and improve productivity across economic sectors.