Malaysia is tightening scrutiny of data center projects in Johor and Selangor. The move follows resident protests and political debate over water, power, and land use spread across the country’s fast-growing industry.

Johor drew about US$35 billion after Singapore paused new data centers from 2019 to 2022. The state now only approves Tier III and IV facilities, blocking new Tier I and II projects over water-use concerns.

Separately, some data center expansions using water-based cooling have been told to wait at least 18 months.

Selangor is reviewing data center proposals against energy and water efficiency rules and a 30% local content requirement covering integrated circuit design, cooling systems, engineering work, and related services.

The tighter checks could affect Malaysia’s large project pipeline. Johor has also drawn investments from Amazon, Microsoft, Tencent, and Alibaba, but it remains unclear whether any specific projects are directly affected.

🔗 Source: Reuters