Singapore passes Digital Infrastructure Bill requiring licensing for large data centres
Singapore's Parliament has passed the Digital Infrastructure Bill, introducing licensing regimes for data centres with a critical IT load of at least 3 megawatts. MPs backed the move but raised concerns about competitiveness, resource use and sustainability.
Singapore's Parliament passed the Digital Infrastructure Bill on Wednesday (7 Oct), introducing two new licensing regimes to strengthen the security, resilience and environmental sustainability of major cloud services and data centres. Nineteen MPs debated the Bill over more than five hours across two days.
Under the new law, operators of data centres in Singapore with a critical IT load of at least 3 megawatts (MW) must be licensed. Existing and new data centres will need to meet facility-level energy-efficiency requirements, including power usage effectiveness targets. Further requirements covering IT equipment and water efficiency could be introduced later.
A separate licensing regime will apply to major co-location and cloud data centres with a critical IT load of at least 10MW, as well as major cloud service providers whose Infrastructure-as-a-Service and Platform-as-a-Service services generate at least S$100 million (US$78.2 million) in average annual revenue from users in Singapore over the preceding three years. The maximum financial penalty for most breaches is S$1 million or 10 per cent of the licensee's annual turnover in Singapore, whichever is higher.
Senior Minister of State for Digital Development and Information Tan Kiat How, who outlined the amendments in parliament on Tuesday (6 Oct), said the government's ambition is not maximum compute but "maximum value from compute" for Singapore, businesses and its people. He said Singapore needs more compute as its economy digitalises and artificial intelligence becomes more widely used, but land, power, water and the carbon budget are finite.
Several MPs raised concerns that the new regulations should not come at the expense of Singapore's competitiveness. MP Sharael Taha (PAP-Pasir Ris-Changi) said regulation should raise standards without making Singapore uncompetitive, and asked whether the government had assessed the cost per megawatt of compliance for existing data centres compared with regional competitors. MP Edward Chia (PAP-Holland-Bukit Timah) said higher standards could be a competitive advantage rather than a regulatory cost, adding that companies handling critical workloads would value resilient infrastructure.
Mr Tan responded that Singapore does not compete on the basis of having the cheapest land or electricity, as other markets have more of both. "Singapore's role is different. It is a trusted, connected, and high-value hub for workloads where reliability, security, resilience, connectivity, and proximity to enterprise activities matter more," he said. He noted that Singapore received more than 20 applications in its recent data centre call for applications exercise, showing that operators continue to see Singapore as a key part of their regional strategy.
On resource constraints, MP He Ting Ru (WP-Sengkang) said future data centre capacity should only be introduced if the grid infrastructure can support the additional energy usage comfortably, and that the cost of any upgrades should not be borne by consumers. Mr Tan said data centres do not buy electricity at the regulated household tariff but from retailers at commercial rates or directly from the wholesale electricity market, and that the growth of data centres is not expected to raise household tariffs. He added that it was not sensible to place an arbitrary cap on data centre capacity, as doing so would constrain the growth of Singapore's broader economy and use of digital technologies.
