SD Guthrie eyes data centre land demand, flags power needs

SD Guthrie Bhd sees opportunities to attract more data centre investment as heightened risks in the Middle East could strengthen Malaysia’s appeal, but additional power generation would be needed to support further expansion, its president and group CEO said.

PETALING JAYA (Oct 28): SD Guthrie Bhd sees opportunities to attract more data centre investment as heightened risks in the Middle East could strengthen Malaysia’s appeal, according to its president and group CEO Mohd Haris Mohd Arshad. However, additional power generation would be needed to support further expansion, he said. In an interview with Bloomberg, Haris said the Middle East had been attractive to data centre investors because of its energy resources, but the US-Iran war had heightened risks in the region.

The plantation group is pursuing industrial land and renewable energy ventures, including a proposed RM1.013 bil land sale by a joint venture in Negeri Sembilan and a proposed solar project in Perak to supply a US technology company’s data centre. Malaysia was already attracting investment before the conflict, with much of the data centre interest concentrated in Johor because of its proximity to land-constrained Singapore, Bloomberg reported.

According to the report, SD Guthrie has more than 210,000ha of freehold land and has earmarked about 10% of its landbank for industrial development and renewable energy assets. Haris said the group expects income from industrial development to account for a third of its revenue by the end of the decade. In a Sept 22 statement, SD Guthrie said Eco Business Park 7 Sdn Bhd had signed a conditional sale and purchase agreement to sell two industrial land parcels totalling 221.665 acres to Tera Data Centers (Malaysia) Sdn Bhd for approximately RM1.013 bil.

The parcels are within Eco Business Park 7 in Mukim Jimah, Port Dickson. The industrial park is a joint venture development involving Eco World Development Group Bhd, SD Guthrie and NS Corporation within the Malaysia Vision Valley 2.0 development corridor, the statement said. The purchaser is part of a Singapore-headquartered digital infrastructure platform with operations in Malaysia, Thailand and Indonesia, it added.

In a separate statement on Sept 29, SD Guthrie said G3nerasi Kinta Sdn Bhd had signed a bilateral energy supply contract term sheet with a US-based multinational technology company for a proposed 680MW renewable energy project in Perak. The project is expected to begin commercial operations in 2029 and supply renewable electricity to the customer’s data centre under the Corporate Renewable Energy Supply Scheme (CRESS), the group said.

Meanwhile, the government has approved a requirement for data centres to use at least 30% renewable energy, based on their total capacity or energy consumption, Deputy Prime Minister Datuk Seri Fadillah Yusof told the Dewan Rakyat on Oct 27, The Edge Malaysia reported. Fadillah, who is also energy transition and water transformation minister, said the Energy Commission was developing the framework and guidelines for the requirement and self-generation facilities. He said operators were also encouraged to generate their own electricity through solar power to prevent the cost of meeting the industry’s growing demand from being shifted to other consumers.

Each data centre electricity supply application undergoes a technical assessment covering projected demand, transmission and distribution capacity, and the infrastructure investment required, he said. The government would prioritise sufficient capacity and reserve margins, grid stability and continuity of supply to all consumers as demand grows, he added. Separately, Tenaga Nasional Bhd has pledged to connect data centres to the electricity grid within one year once they receive approval from the ministry-chaired committee, The Edge Malaysia reported. Speaking at Singapore International Energy Week on Oct 27, TNB chief distribution network officer Ahmad Sazree Abd Aziz said demand forecasting, network capacity planning and targeted infrastructure development were needed to accommodate rising consumption while maintaining a reliable network.