Malaysia: (i) Implementation of Data Centre Framework and (ii) Initiative for sustainable data centre development

Data Centre Framework & Green Building Index Data Centre Tool Version 2.0

14 Aug 2025 4 minute read

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Data Centers Green Buildings

In brief

July 2025 marks key developments in Malaysia’s data centre market:

The Malaysian Government introduced a new Data Centre Framework on 22 July 2025, set to take effect in October 2025.
The Malaysia Green Building Council announced the release of Green Building Index Data Centre Tool Version 2.0 on 24 July 2025, to be implemented for all registered data centre projects starting 1 February 2026.

Data Centre Framework
Green Building Index Data Centre Tool Version 2.0
Conclusion

Data Centre Framework

Implementation of Data Centre Framework

In a joint press release dated 22 July 2025, the Malaysian Ministry of Investment, Trade and Industry (MITI) and the Ministry of Digital announced key outcomes from the Data Centre Task Force (DCTF) meeting held on 21 July 2025. The DCTF meeting was co-chaired by the Minister of MITI, YB Senator Tengku Datuk Seri Utama Zafrul Abdul Aziz and the Minister of Digital, YB Tuan Gobind Singh Deo, and have reached the following strategic resolutions aimed at advancing Malaysia’s digital infrastructure:

1. New Data Centre Framework:

The Ministry of Digital will launch a new Data Centre Framework (Kerangka Kerja Pusat Data) in October 2025, to ensure that data centre development policies and implementation are coordinated in a comprehensive, transparent, and proactive manner.

2. MIDA being the principal agency:

The Malaysian Investment Development Authority (MIDA) will serve as the focal point and principal agency responsible for evaluating and approving all applications involving new data centre projects as well as expansion of existing data centre investments.

3. Strategic coordination:

DCTF, a multi-agency strategic platform established in February 2025, led by MITI and approved by the Malaysia Digital Economy Corporation, will be responsible for formulating, coordinating, and monitoring the implementation of policies and development initiatives for the country’s data centre industry, encompassing aspects of planning, investment approval, and infrastructure requirements.

Application process and documentation

At present, there is no formal guideline, directive or circular issued by MIDA outlining the application process and/or the supporting documents required for obtaining the approval from MIDA in respect of any new development or expansion of data centre projects. Based on enquiries made with MIDA, we understand that the applicants will be required to complete a prescribed application form and provide the requisite supporting documents. In order to initiate its application, the applicants are encouraged to reach out to the Business Services and Regional Operations Division of MIDA for pre-consultation and seek guidance on the steps to be taken to proceed with their application, since there is no written guideline or any other written materials issued by MIDA or any other authorities at this point in time.

Please note that the information provided above should not be construed as guidance given by us, MIDA, or any other authorities.

Green Building Index Data Centre Tool Version 2.0

The Malaysia Green Building Council has recently announced the release of GBI NRNC: Data Centre Tool and Reference Guide Version 2.0 ("GBI DC Tool 2.0") on 24 July 2025. As background, the Green Building Index (GBI) is an environmental rating system for buildings developed by Greenbuildingindex Sdn Bhd and it is Malaysia’s first comprehensive rating system for evaluating the environmental design and performance of Malaysian buildings. Such GBI DC Tool 2.0 falls under the ambit of the GBI.

The GBI DC Tool 2.0 is developed to support enhanced sustainability practices and is a more effective assessment of sustainability performance in data centres. It provides a framework for assessing data centre sustainability, focusing on metrics like Power Usage Effectiveness (PUE), Water Usage Effectiveness (WUE), carbon offset strategies and renewable energy use.

The GBI DC Tool 2.0 is set to be implemented for all registered data centre projects starting 1 February 2026. Please refer to the GBI DC Tool 2.0 here and the keynote address by the Deputy Minister of MITI in launching the GBI DC Tool 2.0 here.

Based on enquiries made with GBI, we understand that an applicant may submit a “green certificate” obtained from GBI with their MIDA application. Subject to applicable policies and further consultation, this may also support applications for green tax incentives.

Conclusion

The introduction of the Data Centre Framework and GBI DC Tool 2.0 reflects Malaysia’s strategic commitment to fostering a robust, sustainable, and well-regulated data centre industry. While procedural clarity is still evolving, these initiatives mark a significant step forward in aligning infrastructure development with national digital and environmental goals.

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Charles Chang (Associate) and Alicia Tan (Legal Assistant) contributed to this legal update.

© 2025 Wong & Partners. All rights reserved. Wong & Partners, member of Baker & McKenzie International. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

Contact Information

Ai Leen Tang
Partner
Kuala Lumpur
Read my Bio
aileen.tang@wongpartners.com

Erna Farhana Hamzah
Partner
Kuala Lumpur
erna.farhana@wongpartners.com

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