KUALA LUMPUR: Malaysia is placing greater emphasis on energy and water efficiency for its data-centre investment, with sustainability benchmarks now tied to incentives under the Digital Ecosystem Acceleration Scheme, said Malaysian Investment Development Authority (Mida) deputy chief executive officer (investment development) Zuaida Abdullah (pic).
Zuaida said Malaysia was determined to “build green, not simply big”, with data-centre projects measured against Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE) benchmarks under the Digital Ecosystem Acceleration Scheme (DESAC).
“Data centres are hungry for both power and water. And as they multiply, so does the question of how sustainably they run. Malaysia’s answer is clear: we intend to build green, not simply big,” she said in her address at Panduit Technology Day Malaysia here yesterday.
Zuaida said meeting the sustainability benchmarks had become a condition for projects seeking incentives under DESAC, underscoring the government’s push to ensure the country’s rapid expansion of digital infrastructure does not come at the expense of its energy and water resources.
“Under our sustainability guidelines, data-centre projects are now measured against firm benchmarks for PUE and WUE. And through the DESAC, meeting those benchmarks has become a condition of the incentives we offer. Here, it is no longer optional; it is a standard,” she added.
Malaysia continues to attract substantial investment into data centres, cloud computing and other digital infrastructure, driven partly by the rapid growth of artificial intelligence.
In the first quarter of 2026 alone, the information and communication subsector recorded RM38.9 billion in approved investments, of which RM34.6 billion, or 88.9%, was related to data centres, cloud computing and digital infrastructure across 33 projects, said Zuaida.
She said the scale of investment reflected Malaysia’s growing position in the global race to build infrastructure capable of supporting increasingly compute-intensive AI applications.
“AI is demanding. Compute-intensive applications require far greater computing power, connectivity and energy capacity than anything before them,” she stressed.
“Malaysia’s digital ambitions rest not on software and innovation alone, but on a robust compute infrastructure ecosystem, from data centres and high-speed connectivity to reliable power systems and the supporting technologies that let them all operate efficiently and at scale.”
The investment momentum is also reflected in the amount supported under DESAC, with RM75.8 billion in approved investments backed by the scheme in 2025.
Zuaida said attracting investments, however, was only the beginning, with Malaysia now needing to ensure that its infrastructure, talent and industrial capabilities could keep pace with the rapid adoption of AI.
She emphasised that physical infrastructure would play an increasingly important role in improving the sustainability of data centres through smarter power distribution, intelligent monitoring and more efficient designs.
“A greener data centre is, at its heart, a better-engineered one, smarter power distribution, intelligent monitoring, and designs that waste less at every layer,” she said.
“When infrastructure is efficient by design, sustainability and performance stop being a trade-off and begin reinforcing one another.”
The government is also seeking to ensure that the expansion of digital infrastructure generates greater economic spillovers for Malaysian companies.
Zuaida said Mida was working to widen local participation in the technology ecosystem through structured vendor development programmes aimed at connecting Malaysian engineering firms, system integrators and technology service providers with multinational companies.
“We are deeply committed to ensuring our local industries grow alongside these major investments,” she said.
“Through structured vendor development programmes, we are establishing a clear pathway for our local engineering firms, system integrators and technology service providers to plug directly into the global value chains of multinational leaders.”
She said Malaysia’s ambition was not simply to attract large investment figures, but to build an ecosystem around those investments that would strengthen domestic capabilities and create longer-term economic benefits.
“This ecosystem cannot be built by government alone. It takes policymakers, investors, technology providers, infrastructure developers and local industry working as one,” she pointed out.
“Malaysia’s success in the AI era will not be measured only by how much digital investment we attract.
“It will be measured by the strength of the ecosystem we build around it, the infrastructure we develop, the capabilities we cultivate, and the partnerships we forge.”
Zuaida said Mida’s role extended beyond securing investment commitments to ensuring projects were successfully implemented and generated meaningful economic spillovers.
“Our commitment goes beyond attracting investments.
“We are just as focused on seeing investments through, implemented successfully, creating real economic spillovers, and offering an environment where business can grow, innovate and expand for the long term,” she added.
She said that Malaysia would continue working with technology providers and industry players to strengthen the infrastructure needed to support the country’s next phase of AI and digital growth.
“Malaysia’s digital future will be built through partnerships between industry, technology providers, businesses and the government,” she added.
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