Khazanah-Backed UEM Ignites Malaysia’s $40B Data Center Gold Rush

Malaysia's digital infrastructure boom just got a turbocharge—and sovereign wealth is holding the throttle.

UEM Group, backed by state investment arm Khazanah Nasional, is positioning itself as the backbone of Southeast Asia's next hyperscale hub. The $40 billion surge in data center investments transforms Malaysia from an outsourcing backwater to a regional cloud battleground.

Wall Street analysts whisper about 'overheated projections'—but when has that ever stopped a government-linked conglomerate? The real play: converting palm oil subsidies into server farm dividends.

Khazanah’s UEM intends to use its extensive land assets to back a data center based in Johor

During an interview in Kuala Lumpur on Tuesday, November 11, Amran mentioned that Sunrise is making a strategy for the Gerbang Nusajaya Industrial Park, which will operate on renewable energy and cover 40 acres.

Moreover, he highlighted that UEM Lestra Bhd., their green energy division, is preparing to initiate the construction of a 1-gigawatt hybrid solar plant, funded by investors such as the Macquarie Group and I Squared Capital Advisors. Notably, the initial stage of this plant will be a 500-megawatt facility priced at  2.5 billion ringgit, as stated by Lestra earlier this year. 

Meanwhile, UEM is exploring the potential investment in water treatment for industrial parks, which is crucial for cooling data centers. Amran stated, “This aligns with providing energy to industrial parks.” He added that there is a significant demand for water and power for industrial use, even without considering the needs of data centers. 

According to BMI, a Fitch Solutions company, Malaysia ranks one of Asia’s top three growth markets. The development of data centers in the region is expected to significantly increase power demand until 2028, as mentioned in an industry outlook report released this week.

However, this rapid expansion stresses the country’s land and power resources, including the electrical grid. BMI noted that it has become increasingly important yet more challenging to meet this new demand for clean energy since renewable energy commitments are becoming a key focus for data center operators’ business plans. 

On the other hand, the Malaysian conglomerate, which has primarily been associated with property and road infrastructure projects, is now prioritizing green energy and sustainability initiatives for future growth. 

Last year, Lestra acquired a majority share in Nur Power, Malaysia’s only independent power utility company, for an undisclosed amount. They also pledged 1.5 billion ringgit to help reduce carbon emissions in industrial parks nationwide by 2026. 

Amran expresses his optimism about 2026 based on the current deals they have struck

Currently, Lestra supplies biogas power to Kulim Hi-Tech Park, located in Kedah state, which is home to companies such as Infineon Technologies AG and AT&S that specialize in semiconductors and electronic components. The biogas facility has a capacity of 350 MW and is fully utilized. 

“We can upgrade the plant to have up to 1 gigawatt of capacity if we get approval from the regulators,” Amran mentioned. He also stated that the company is interested in selling biogas power to other industrial areas via Malaysia’s national grid. 

He believes the group will perform better on the profit side in 2025, thanks to increased contributions from Sunrise and other divisions. He also expressed Optimism about 2026 based on the current deals they have lined up. 

Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.