KUALA LUMPUR, Sept. 17 (Xinhua) -- Rapid data center expansion in Malaysia will drive a sharp increase in electricity demand over the next 10 years, requiring substantially higher investment across the power sector, Moody's Ratings said on Thursday.
In a note, the rating agency said data center growth would be supported by competitively priced and readily available power, government initiatives and spillover demand from Singapore.
Data center power consumption in Peninsular Malaysia is projected by the government to account for 31 percent of total electricity consumption by 2035, up from 4 percent in 2025. This will underpin long-term electricity demand growth, although the scale and pace of expansion will depend on market and execution risks, Moody's said.
To meet the additional demand, Malaysia's utility firms and independent power producers will need to add at least 14-17 gigawatts (GW) of generation capacity over the next decade, requiring 80 billion ringgit (19.52 billion U.S. dollars) to 95 billion ringgit of investment.
"The data center-led demand growth will be credit positive in the long term if utilities can execute generation, transmission and distribution projects effectively. In the meantime, financial leverage of the rated utilities will rise during the development phase, reducing financial headroom," said Moody's. ■