States warned against pledging excess water for data centre projects

State authorities need to exercise greater caution when approving data centre projects to ensure they do not overcommit precious water resources, according to a parliamentary statement by the responsible minister. The concern reflects growing pressure on Malaysia's water infrastructure as the nation seeks to attract technology investments while managing finite natural resources. Data centre operations are notably water-intensive, requiring substantial volumes for cooling systems and ongoing facility maintenance. The minister's remarks highlight instances where project approvals have proceeded without adequate evaluation of local water availability and long-term sustainability implications. Officials stressed the importance of conducting thorough environmental and resource assessments before greenlighting such developments. The guidance suggests state governments should balance economic opportunities from technology investments against the practical constraints of their water supply systems. Industry observers note this reflects broader policy considerations as Malaysia positions itself as a regional data centre hub while managing environmental concerns.