Malaysia tightens data centre tariffs and adds local content requirements
The investment, trade and industry minister said data centres must now pay for their full contracted power and cover upgrade costs, ending previous subsidies.
In a parliamentary reply, Investment, Trade and Industry Minister Johari Ghani detailed new rules for data centre operators, separating their electricity tariffs from household subsidies and obliging them to pay for the full amount of power they contract, regardless of actual consumption. The policy also shifts the cost of upgrading Tenaga Nasional Bhd's transmission infrastructure onto investors and requires the adoption of water-recycling technology to lessen pressure on state water supplies.
Additionally, the Data Centre Task Force has set a minimum 3% local-content target for consultancy, contracting, engineering and legal services. Johari highlighted the sector's rapid growth, noting its contribution rose from RM900 million in 2021 to RM14.1 billion this year, with 57 centres operating and 60 projects under development. Total reported investment now stands at RM385.7 billion, split between foreign and domestic investors, and major tech firms are being urged to share AI and cloud resources with local universities and businesses.
Why it matters
The changes aim to ensure data centre growth benefits Malaysia's economy and reduces reliance on subsidised power.
How the sides frame it
LOW AGREEMENTLeft-leaning coverage stresses the need for states to verify water capacity and cautions against overpromising water supplies, while centrist coverage focuses on the new electricity tariff rules, cost shifts to investors, and local-content requirements for data centres.
LEFT
Frames the story as a warning that state authorities must verify water resources before approving data centre projects.
CENTER
Frames the story as an announcement of tighter tariffs, cost-shifting measures and local-content targets for data centre operators.
The left emphasises
- states often become eager to attract data centre projects
- they may promise water supplies without fully calculating existing resources
- developers must cover additional infrastructure costs
In this story
Related stories
4 in this thread