Data centre investors to fund electricity transmission upgrades
Operators will also be charged for allocated power capacity they do not use, while each data centre must meet a 30% local content requirement.
Investors establishing data centres will have to pay for electricity transmission upgrades needed to supply their facilities, Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani told the Dewan Rakyat on Oct 15.
Johari said Malaysia had sufficient power capacity, but additional data centres could strain transmission infrastructure. Tenaga Nasional Bhd (TNB) would advise on the upgrades required, with investors bearing the costs to protect existing economic activities from disruption.
Once facilities and their electricity supply were operational, operators would also be billed for their allocated capacity even when consumption fell short of that allocation. Johari said operators that failed to pay would not be permitted to operate.
He was answering a supplementary question from Rodziah Ismail (PH-Ampang) about preventing additional infrastructure costs associated with data centres from falling on other parties.
Federal oversight of data centres’ energy needs would involve the Energy Commission, the Ministry of Investment, Trade and Industry (MITI) and the Finance Ministry, Johari said. This was intended to safeguard electricity supplies for existing industrial and household users.
On water, Johari urged state governments to be cautious about supply approvals so that existing resources remained adequate. He said the use of water-recycling technology was already mandatory.
Addressing Rodziah’s question about net value added from RM385.7 billion in data centre investments approved since 2021, Johari said the Data Centre Task Force (DCTF) required each facility to have at least 30% local content.
Citing Bank Negara Malaysia estimates, he said the sector’s contribution to gross domestic product (GDP) increased to RM14.1 billion in 2025 from RM900 million in 2021.
