Ensure sufficient power, water before approving data centres, says DPM

KUALA LUMPUR: State governments must ensure sufficient electricity and water capacity before approving investments such as data centres, says deputy prime minister Fadillah Yusof.

Fadillah, who is also the energy transition and water transformation minister, said a national task force has been set up to evaluate proposed data centre projects, including their energy and water requirements, as well as their potential economic benefits.

“Every state must ensure that before approving any investment, including data centres, it needs to determine whether it has the capacity in terms of energy and water,” he told reporters after officiating the 5th World Digital Economy and Technology Summit 2026 at the World Trade Centre Kuala Lumpur today.

“We want to ensure that whatever technology comes to Malaysia, not just data centres, generates economic returns, improves societal wellbeing, and provides training opportunities so that Malaysians are equipped with new technological skills,” he said.

Fadillah said the government would not compromise on water for public consumption, adding that industrial users should instead rely on reclaimed or recycled water.

“We have enough water. The key is to separate water for consumption from water for industrial use.

“Water for consumption is treated potable water, while water for industry should come from reclaimed or recycled wastewater. That is our policy.

“We do not compromise when it comes to the needs of the people. That is the main point,” he said.

Fadillah added that the federal government is drafting a national reclaimed water policy in consultation with ministries, state governments, industry players, and NGOs.

Yesterday, Fadillah told the Dewan Rakyat that data centre operators may be fined if they ask for more water or power than they need.

He said the federal government did not agree with companies not fully utilising large amounts of water or electricity they had reserved.