Malaysia keeps winning data centres. The harder question is who lends the billions to build them, and this week produced an answer that says a lot about how the country wants to grow.
On Tuesday, Sime Darby Property's new economy arm said it had set up a green sukuk programme of up to RM2.6 billion (about USD640 million) to help fund hyperscale data centres at Elmina Business Park near Kuala Lumpur. The first facilities are due by 2027 under a 20-year lease to a global technology company, and the developer says it is the first green sukuk of its kind for a data centre, backed by Maybank, OCBC and the Asian Development Bank.
It follows a quieter first from April, when sovereign wealth fund Khazanah Nasional issued Malaysia's first tokenised sukuk: a RM100 million Islamic bond recorded on a locally built blockchain called Aeris Chain, under its RM20 billion Sukuk Danum programme. The Securities Commission and Bank Negara have both signalled the pilot could become a template for financing digital infrastructure.
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Why financing, not land, is the real bottleneck
Malaysia already has the sites and the tenants. Data centre capacity is heading from roughly 1 gigawatt today toward a projected 3 to 4 gigawatts by 2029, and building at that scale needs patient, long-dated money that ordinary loans struggle to supply. Sukuk, which pay returns without charging interest so they stay Shariah-compliant, are something Malaysia issues more of than almost anywhere, so pointing that deep Islamic-finance market at data centres is a natural fit. The 2026 federal budget set aside RM5.9 billion to support AI, but public money alone will not cover a build-out this large.
What it means for Malaysian readers
For readers here, the interesting part is the strings attached. A green sukuk commits the borrower to environmental targets, and that lands at an awkward moment. On the same day as the Sime Darby announcement, the OECD warned that Malaysia's data centre rush is delivering strong growth but few jobs while piling pressure on power and water. Johor, set to hold most of the country's capacity by 2030, now charges data centres a special water tariff of RM5.33 per cubic metre and has rejected close to a third of applications that could not show credible conservation plans. A single 100 megawatt facility can draw around 4 million litres of water a day, and Tenaga Nasional expects data centre electricity demand to pass 5,000 megawatts by 2035.
Green financing is where those two pressures meet. If investors will only buy sukuk tied to renewable energy and efficient cooling, the money itself starts nudging operators toward the water and power discipline regulators have been demanding. That is a gentler lever than a moratorium, and it lets Malaysia keep courting hyperscalers without writing a blank cheque on its grid.
What to watch
The test is whether these deals stay pilots or become the norm. Tokenised sukuk promise cheaper, faster issuance and even fractional ownership, which could eventually let ordinary investors put small sums into infrastructure that used to be closed to them. For now the pieces are lining up: a regulator building the rails, banks proving the structure, and a developer putting real ringgit behind it.
Malaysia has spent two years winning data centre investment. The next race is quieter and just as important: paying for it in a way the country can actually sustain.
Images courtesy of Winston Chen and Matthew Henry on Unsplash.
