Investors in Malaysia’s fast-growing data centre hub of Johor have been asked to postpone water-cooled expansion projects for at least 18 months, as authorities grapple with drought and mounting pressure on the state’s water supplies.
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Officials say the temporary deferral will apply to developers whose facilities depend on water for cooling servers that run around the clock, amid growing unease among residents and environmentalists that billions of dollars in tech investment are colliding with basic water needs.
Johor is now home to 15 operational data centres with dozens more under construction. Cooling these vast server farms, which are essential for everything from artificial intelligence to e-commerce, requires about 675 million cubic metres (178.3 billion gallons) of water per day, according to government estimates.
Despite these pressures, Johor officials say water supplies remain adequate overall but acknowledge distribution problems.
“It’s not the sufficiency, it’s the management … how to make sure that water is channelled to the right place,” said Lee Ting Han, Johor’s state executive councillor for investment and trade.
Residents have complained of worsening supply disruptions in recent months as rising industrial demand compounds the strain caused by droughts and pollution.
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Earlier this month, a sand mining accident forced four treatment plants to close, cutting off water to more than half of Johor’s 1.7 million residents for up to 12 hours.