Southeast Asia’s Data Centres Should Be Sited in More Water-Rich Areas: Experts

Why It Matters

Relocating data centres to water‑abundant zones mitigates supply disruptions, reduces community backlash, and protects long‑term investment viability in a region facing escalating water stress.

Key Takeaways

• Data centres may use up to 2 billion litres of water per year.
• Indonesia’s new capital Nusantara lies near water‑rich Mahakam River.
• Malaysia proposes Perak and Pahang as low‑stress water sites.
• Higher water tariffs could fund reliable supply without deterring operators.
• Desalination in Batam could cost as little as $0.30 per tonne.

Pulse Analysis

The rapid proliferation of hyperscale data centres across Southeast Asia has outpaced local water infrastructure, with typical facilities drawing 25 million to 770 million litres annually and the largest exceeding 2 billion litres. Concentrations in Jakarta, Johor and Batam have already strained municipal supplies, sparking protests and highlighting a mismatch between digital growth and essential resource planning. This water intensity differentiates data centres from traditional energy‑focused site selection, demanding a distinct sustainability lens.

Industry leaders and water authorities now advocate early siting in water‑rich catchments. Indonesia’s upcoming capital, Nusantara, sits 90 km from the Mahakam River, offering a stable raw‑water source, while Malaysia’s Perak and Pahang states present comparable abundance. Policymakers are also revisiting tariff frameworks to internalise the true cost of continuous, high‑volume water use, ensuring that pricing reflects both supply reliability and the need for infrastructure upgrades such as pipelines and treatment facilities.

Investors and operators are responding with adaptive technologies. Companies like Bridge Data Centres have piloted treated‑wastewater cooling, and Batam is evaluating desalination at roughly US$0.30 per tonne—prices comparable to Saudi benchmarks. These measures, coupled with revised tariffs, aim to secure uninterrupted water supplies without compromising profitability. As the Taskforce on Nature‑related Financial Disclosures highlights, aligning water risk management with data‑centre expansion is becoming a critical factor for sustainable investment decisions in the region.