No postponement of data centre investments due to water supply constraints—Miti

KUALA LUMPUR (Feb 11): As of January 2026, no data centre investment in Malaysia had been deferred, was at risk of being deferred or might potentially be transferred to another country due to water supply constraints, according to the Ministry of Investment, Trade and Industry (Miti).

In a written reply published on Parliament’s website on Tuesday, the ministry said the government remains committed to ensuring that data centre projects are realised in an orderly fashion.

“This includes ensuring the availability of sufficient water resources as well as exploring alternative water resources that are more sustainable for use of data centre operations nationwide.

“Through strategic collaborations with global technology experts, the government has explored various methods, including immersion cooling,” it said.

Miti explained that immersion cooling is a method that uses specialised fluids to capture heat directly from servers, which can reduce water consumption by almost 100% for core cooling processes and fluid-based cooling systems.

The ministry was responding to a question from Aminolhuda Hassan (PH–Sri Gading) regarding the estimated value of foreign direct investment that has been postponed, is at risk of being postponed, or may potentially move to rival countries following Johor’s move to defer the development of new data centres until 2027 due to water supply constraints.

Miti added that through these proactive and integrated measures, the government is confident that Malaysia will not merely become a base for data centres, but also a competitive and resilient regional digital hub as well as a leading example of balancing industrial progress with environmental sustainability.

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