The southern Malaysian state of Johor, a burgeoning data center hub in Southeast Asia, has taken a cautious approach to its rapid growth. In a bid to balance economic development with environmental sustainability, the state government has rejected nearly 30% of data center applications over the past five months.
The Straight Times reported that the stringent review process, initiated in June 2024, aims to ensure that data center operators prioritize sustainable practices, such as reducing water and energy consumption. The committee overseeing these applications also scrutinizes proposed plans for job creation and wage offerings.
Johor’s data center capacity has surged from a modest 10 megawatts (MW) in 2021 to an impressive 1.3 gigawatts (GW) currently, with projections of reaching 2.7GW by 2027. While this rapid expansion has positioned Johor as a regional data center powerhouse, the state government is determined to avoid the pitfalls of unchecked growth.
Johor seeks to prevent the strain on local resources, particularly water and electricity, that could arise from excessive data center development by imposing stricter regulations. The committee’s focus on sustainability and job creation aligns with the broader national goal of promoting responsible economic development.
The Malaysian government’s stance on data center development reflects a growing emphasis on sustainability and social impact. According to ST, the upcoming sustainable development guidelines for data centers, to be announced by the fourth quarter of 2024, will further shape the industry’s trajectory.
