State’s pioneering wastewater recycling initiative supports RM164b data centre boom sustainably

Johor has become the first Malaysian state to integrate large-scale reclaimed wastewater into industrial cooling systems, targeting its rapidly expanding data centre industry while reducing pressure on potable water resources.

First-of-its-Kind Programme

The Ministry of Energy Transition and Water Transformation (Petra), in collaboration with the Johor government, has launched a programme supplying up to 12 million litres of treated wastewater daily to reclaimed water plants serving data centres. The water will be channelled to facilities operated by Bridge Data Centres (BDC), Computility Technology Malaysia, and DayOne Data Centre Malaysia II.

Aligning Growth with Sustainability

Deputy Prime Minister and Petra Minister Datuk Seri Fadillah Yusof said the initiative ensures data centre expansion will not strain Johor’s potable water supply. “This is one for the future — water that would otherwise be discarded is now reused for industry,” he said, noting the programme supports the 13th Malaysia Plan’s Priority D6 and the Water Transformation Roadmap 2040 (AIR2040).

Driving a Data Centre Hub

Johor Menteri Besar Datuk Onn Hafiz Ghazi said the state has approved 42 data centre projects worth RM164.45 billion, with over 6,000 jobs expected. Seven new applications involving water usage of up to 76 million litres per day are under review. As of June, total requests for alternative water supply reached 136 million litres per day.

Coordinated Oversight

The Johor Data Centre Development Coordination Committee, co-chaired by three state executive councillors, oversees project approvals to ensure renewable energy use and sustainable water management. Johor Special Water (JSW) — a subsidiary of Permodalan Darul Ta’zim — holds exclusive rights to wastewater reclamation projects under a 2011 agreement with Indah Water Konsortium (IWK).

Key Agreements and Operations

On Aug 11, three agreements were formalised:

• IWK–JSW: Supply treated effluent from sewage plants for reclaimed water production.
• JSW–BDC & Computility: Use reclaimed water in cooling systems; BDC’s Ulu Tiram plant began production in June, Computility’s Iskandar Puteri facility starts in December.
• JSW–DayOne Data Centres: Supply raw water from the Tebrau River to Kempas Tech Park, operational in November.

Strengthening Johor’s Green Leadership
Onn Hafiz said the programme reduces reliance on treated water for industrial use and enhances Johor’s position as a green industry leader. Fadillah added that the model should be emulated nationwide to promote sustainable economic growth.

Johor’s reclaimed water initiative marks a significant step in balancing industrial expansion with resource conservation. As data centre investments surge, the state’s approach demonstrates how green infrastructure can underpin economic transformation while safeguarding vital water resources.

Sources: Malay Mail (2025) , The Star (2025)

Keywords: Johor Data Centre, Wastewater Recycling, Reclaimed Water, Sustainable Cooling, Green Industry, IWK