Proprietary data
Data Center Power & Policy in Malaysia
Every government action on data centers and power in Malaysia that we have verified: moratoriums, grid rules, incentives, tariffs and plans, with the power indicators that drive site selection.
By Amit Jain
Reviewed by Deepti Agrawal
Updated 8 October 2026
In short
As of 8 October 2026, DC Market Insights tracks 8 government actions on data centers and power in Malaysia, 5 of them in force. Malaysia has 1 restriction on new data centers in force: Limits on approvals of non-AI data centres (Prime Minister statement in Parliament). 1 incentive scheme applies: Digital Ecosystem Acceleration (DESAC) Scheme – guidelines and procedures for application.
Market snapshot
Malaysia power and policy: key facts
- Industrial electricity price: 105 USD/MWh (2026). Rank 7 of 13 tracked countries, highest first.
- Renewable share of electricity generation: 21% (2025). Rank 11 of 18 tracked countries, highest first.
- Grid emission factor: 0.74 kgCO2/kWh (2024). Rank 2 of 13 tracked countries, highest first.
- Latest change: Limits on approvals of non-AI data centres (Prime Minister statement in Parliament) (Prime Minister of Malaysia, 24 Feb 2026).
- By type: 2 restriction, 2 regulation, 2 incentive and 1 efficiency rule.
Power indicators for Malaysia
Latest official figure for each indicator, with earlier years where we have them.
In force now in Malaysia
Restriction (1)
Limits on approvals of non-AI data centres (Prime Minister statement in Parliament)
Prime Minister Anwar Ibrahim told the Dewan Rakyat during Ministers' Question Time on 24 February 2026 that the government has restricted the entry of new data centres that are not related to AI, to ease strain on the national electricity grid and water supplies; projects offering AI or high-technology benefits face easier approval.
Incentive (1)
Digital Ecosystem Acceleration (DESAC) Scheme – guidelines and procedures for application
DESAC tax incentives cover qualifying activities including data centre and cloud computing. Tier 1: Investment Tax Allowance of 100% on qualifying capital investment (excluding land) or a 10% special tax rate; Tier 2: 60% ITA or 15% special tax rate; 5 or 10 years. Applications received by MIDA from 1 January 2022 to 31 December 2027 are eligible. Date is the publication date of the alert.
100 % investment tax allowance (Tier 1) Tier 2: 60% ITA
Efficiency rule (1)
Guidelines for Sustainable Development of Data Centres
MITI launched the Guidelines for Sustainable Development of Data Centres in December 2024 as the sustainability framework operators must follow to qualify for DESAC tax incentives; objectives include improving water efficiency in data centre infrastructure. DESAC applications are open until 31 December 2027. (source gives month only)
Regulation (1)
National Cloud Policy
Prime Minister Anwar Ibrahim unveiled the National Cloud Policy, which the government links to strengthening user trust and data security in cloud adoption.
Plan or strategy (1)
National Energy Transition Roadmap (NETR)
National roadmap published by the Ministry of Economy (forewords dated 29 August 2023). Target 1 is a 70% renewable energy share of installed capacity by 2050. Its Integrated RE Zone flagship includes a pilot RE Zone encompassing an industrial park, zero-carbon city, residential development and data centre.
70 % RE installed capacity share by 2050 Target 1: 70% RE installed capacity share by 2050
Announced and proposed
Measures that are not yet in force. Status changes when the rule takes effect or is withdrawn.
Johor halts approvals of Tier 1 and Tier 2 data centres; reclaimed water requirement
Johor will no longer approve Tier 1 and Tier 2 data centres, which can use up to 50 million litres a day, and will focus on Tier 3 and Tier 4 projects. Data centres must use reclaimed water rather than supplies from Syarikat Air Johor. As of November 2025 Johor had approved 51 data centre projects.
Data Centre Task Force decision: MIDA as focal point for data centre applications and sustainable data centre framework
At the third Data Centre Task Force meeting of 2025, MITI and the Ministry of Digital agreed that MIDA will be the focal point for all applications for new data centre projects and expansions, and that a sustainable data centre framework under the Ministry of Digital is expected to be introduced in October 2025.
Special incentive framework for AI data centres (National Investment Council decision)
MITI stated that the National Investment Council agreed for MIDA to provide an incentive framework for AI data centres that rewards energy- and water-efficient equipment and sufficient renewable energy. The article reports RM114.7 billion of approved data centre and cloud investments in 2021-2023.
Timeline of data center and power policy in Malaysia
| Date | Action | Type | Status | Authority |
|---|---|---|---|---|
| 24 Feb 2026 | Limits on approvals of non-AI data centres (Prime Minister statement in Parliament) | Restriction | In force | Prime Minister of Malaysia |
| 27 Nov 2025 | Johor halts approvals of Tier 1 and Tier 2 data centres; reclaimed water requirement Johor | Restriction | Announced | Johor State Government |
| 21 Jul 2025 | Data Centre Task Force decision: MIDA as focal point for data centre applications and sustainable data centre framework | Regulation | Announced | Ministry of Investment, Trade and Industry (MITI); Ministry of Digital; MIDA |
| 16 Jan 2025 | Digital Ecosystem Acceleration (DESAC) Scheme – guidelines and procedures for application | Incentive | In force | MIDA; Ministry of Finance |
| 1 Dec 2024 | Guidelines for Sustainable Development of Data Centres | Efficiency rule | In force | Ministry of Investment, Trade and Industry (MITI) |
| 1 Oct 2024 | National Cloud Policy | Regulation | In force | Prime Minister's Office; Ministry of Digital |
| 11 Jun 2024 | Special incentive framework for AI data centres (National Investment Council decision) | Incentive | Announced | Ministry of Investment, Trade and Industry (MITI); MIDA; National Investment Council |
| 29 Aug 2023 | National Energy Transition Roadmap (NETR) | Plan or strategy | In force | Ministry of Economy |
How Malaysia compares
Latest official figures for the countries we track.
| Country | Industrial power price | Renewable share | Grid emission factor | Restrictions in force | Incentives in force |
|---|---|---|---|---|---|
| Australia | — | 39% (2025) | — | 0 | 2 |
| Bangladesh | — | 2% (2025) | — | 0 | 0 |
| France | 104 USD/MWh (2025) | 27% (2025) | 0.02 kgCO2/kWh (2025) | 0 | 1 |
| Germany | 180 USD/MWh (2025) | 58.8% (2025) | 0.34 kgCO2/kWh (2025) | 1 | 0 |
| India | 82.1 USD/MWh (2025) | 28.7% (2026) | 0.68 kgCO2/kWh (2025) | 0 | 5 |
| Indonesia | 62.9 USD/MWh (2024) | 16.3% (2025) | 0.68 kgCO2/kWh (2024) | 0 | 1 |
| Ireland | 234 USD/MWh (2025) | 41.3% (2024) | 0.20 kgCO2/kWh (2025) | 2 | 0 |
| Japan | — | 23.1% (2024) | 0.45 kgCO2/kWh (2024) | 0 | 0 |
| Kazakhstan | — | 14.6% (2025) | 0.81 kgCO2/kWh (2025) | 0 | 0 |
| Malaysia | 105 USD/MWh (2026) | 21% (2025) | 0.74 kgCO2/kWh (2024) | 1 | 1 |
| Netherlands | 148 USD/MWh (2025) | 49% (2025) | 0.20 kgCO2/kWh (2024) | 4 | 0 |
| Pakistan | 97.5 USD/MWh (2026) | 34.7% (2025) | — | 0 | 1 |
| Singapore | 189 USD/MWh (2025) | 2.1% (2024) | 0.40 kgCO2/kWh (2024) | 0 | 0 |
| South Korea | — | 9.8% (2025) | — | 0 | 0 |
| United Arab Emirates | 120 USD/MWh (2026) | 8.8% (2024) | 0.47 kgCO2/kWh (2024) | 0 | 0 |
| United Kingdom | 234 USD/MWh (2026) | 52.1% (2025) | 0.15 kgCO2/kWh (2026) | 1 | 1 |
| United States | 86.2 USD/MWh (2025) | 24% (2025) | 0.35 kgCO2/kWh (2023) | 0 | 1 |
| Uzbekistan | 83.3 USD/MWh (2026) | 19.4% (2025) | — | 1 | 0 |
Questions
Is there a data center moratorium in Malaysia?
Yes. 1 restriction on new data centers is in force in Malaysia: Limits on approvals of non-AI data centres (Prime Minister statement in Parliament).
What incentives does Malaysia offer data centers?
In force: Digital Ecosystem Acceleration (DESAC) Scheme – guidelines and procedures for application. Each is listed with its authority and dates on this page.
What does electricity cost for data centers in Malaysia?
The industrial electricity price in Malaysia was 105 USD/MWh in 2026 (TNB Non-Domestic High Voltage general (Bukan Domestik Voltan Tinggi Am) energy charge 43.03 sen/kWh = RM430.3/MWh, tariff schedule 1 Jul 2025-31 Dec 2027; energy charge only, excludes capacity (RM16.68/kW), network (RM14.53/kW) and retail charges; convert). Data center contracts can differ by voltage level, contract length and location.
How much of Malaysia’s electricity is renewable?
Renewables supplied 21% of electricity generation in Malaysia in 2025.
Where does this data come from?
Each action comes from a page we opened: a law, regulation, gazette notice, ministry or regulator release, grid operator notice or investment agency page, and only when official text is not available a company or trade publication. A second analyst re-opens the source before an item is published. Government sources are linked on the page; all sources come with the Excel data.
What counts as a restriction or moratorium?
A government or grid operator rule that stops, pauses, caps or conditions new data center capacity or grid connections, for a country or a region within it. Proposals are shown as proposed until they take effect.
How are power prices compared?
We use each country’s official statistics for industrial or non-household electricity, converted to US dollars per MWh at the average rate for the year where needed, and show the year and source. Contract prices for data centers can differ.
How often is it updated?
Countries are reviewed on a rolling schedule and changes are added as they are announced. Each item shows the date of the action.
Choosing a market or a site?
Our analysts prepare country briefings on power, grid access, incentives and permits, with every source, in Excel.