The government has put 24 data centre applications on hold while it checks whether enough water and electricity are available, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani told the Dewan Rakyat on 28 October.
Winding up the Budget 2027 debate for his ministry, Johari said the priority was to ensure that the 117 data centres already approved could go ahead before more projects are allowed, and that the government must be very selective.
He said developers must first confirm water availability with state governments before the federal government assesses electricity supply with Tenaga Nasional Bhd. States without sufficient water should not host data centres, he said, noting that water supply is a state matter.
Johari suggested that states charge data centre operators higher water tariffs than ordinary consumers and encouraged investors to bring in water-recycling technology. Where grid capacity is insufficient, the government would consider renewable energy, battery storage and off-grid generation.
He said the government would also assess investors’ financial strength, including their ability to honour electricity supply agreements, under which operators pay for their full contracted capacity even if they use less.