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No More Approvals For Tier 1 And Tier 2 Data Centres In Johor

New data centres will also only be built in designated industrial areas.

by Nurul Kamil
November 28, 2025
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Image: Meta

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Johor’s emergence as the nation’s data centre hub has taken a toll on the state’s water supply. Amid such concerns, the Johor government has declared that it will no longer approve Tier 1 and Tier 2 data centres.

These data centres are categorised as high water users, guzzling roughly 200 times more water than Tier 3 and Tier 4. For comparison, Tier 3 and Tier 4 centres generally consume approximately 200,000 litres a day.

Johor data centre approvals
Image: New Straits Times

According to State Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor, this decision is a part of the new requirements relating to the development of data centres in the state. Under these rules, the state will no longer entertain applications for Tier 1 and Tier 2 facilities. Instead, it will focus on Tier 3 and Tier 4 projects. These advanced facilities supposedly offer more value with lower environmental impact.

The Johor Data Centre Development Coordinating Committee is responsible for approving the projects. Among the criteria considered for approvals include water and electricity usage, environmental impact, water and power usage effectiveness, and fibre-optic infrastructure availability.

microsoft azure data centre
Image: Microsoft

Other key areas are cooling technologies that reduce water dependency, and alternative water sources. Beyond that, the committee considers sustainability factors. This includes green technology initiatives, carbon reduction, and compliance with the Green Building Index.

Jafni went on to explain that new applications will undergo five levels of vetting under PlanMalaysia. The committee will not approve any data-centre applications that add no value to Johor. Aside from guiding investors towards advanced data centre projects, the state will also only allow such facilities to be built in designated industrial zones, not commercial areas.

Related Article YTL, JLand Group Partner For New Gigawatt Data Centre Campus In Johor
water stock image
Image: Steve Johnson via Pexels

Furthermore, data centres must use reclaimed water, rather than relying on supplies from Syarikat Air Johor. According to Jafni, these measures are to prevent negative impacts on nearby communities.

Currently, Johor has approved 51 data-centre projects, 17 of which are already operational. Meanwhile, 11 are under construction.

(Source: New Straits Times)

Filed Under data centrejohor
Updated 12:30 pm, Fri, 28 November 25
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