An aerial shot of Zdata’s facility in Johor (Photo by Zdata)
This article first appeared in The Edge Malaysia Weekly on April 20, 2026 – April 26, 2026
Data centres, known as heavy users of water, are turning to reclaimed water for cooling purposes to avoid competing with households and other industries for potable water and groundwater.
This can be seen in Johor, where data centre operators such as Bridge Data Centres (BDC), Computility Technology (Malaysia) Sdn Bhd, AirTrunk and Dayone Data Centres Malaysia Sdn Bhd are adopting alternative water sources in their operations.
According to estimates by the US-based non-profit Environmental and Energy Study Institute, a mid-sized data centre can consume up to 110 million gallons (416.4 million litres) of water a year for cooling purposes, roughly equivalent to the annual water usage of about 1,000 households.
BDC began its reclaimed water operation last August via the Ulu Tiram water reclamation plant (WRP). Computility Technology plans to use up to four million litres per day (MLD) of reclaimed water for cooling its data centre in Gelang Patah, Johor Bahru.
While the government has not mandated the use of reclaimed water at data centres, the National Water Services Commission (SPAN) in September 2025 published guidelines for data centres to use alternative sources of water. The guidelines prioritise using reclaimed water for cooling if it is available, or installing air-cooled systems with zero discharge. Additionally, last November, Johor State Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor said data centres in the state must use reclaimed water.
Supporting this shift is the collaboration between state-linked entities and industry players. Last August, Indah Water Konsortium Sdn Bhd (IWK) and Johor Special Water Sdn Bhd (JSW) entered into a strategic partnership to develop reclaimed water solutions for the sector.
Through the partnership, IWK will supply 12 MLD of treated effluents from its sewage treatment plants, which will be delivered via an integrated distribution system to the WRPs operated by BDC and Computility Technology.
“The use of reclaimed water entails slightly higher costs compared with potable water. This is due to the added layers of treatment and infrastructure required to ensure the water meets the necessary quality standards for data centre cooling systems.” – Yeo, Computility Technology
Yeo Yong Hwang, director at Computility Technology, a wholly-owned subsidiary of ZData Group Co Ltd, says the company is expected to achieve 57% savings in potable water by using rainwater harvesting and reclaimed water to cool its new data centre, reducing its reliance on groundwater sources.
Founded in 2014 in China, ZData is a provider of IT infrastructure services. It is currently operating and planning to construct more than 30 green data centres in places such as Beijing, Zhangjiakou, Langfang, Tianjin, Ulanqab, Datong Yanggao, Shaoguan and Shaoyang.
ZData’s Johor facility marks its first foray into hyperscale data centre development outside of China. Phase 1 of its facility has been completed and is scheduled to commence operation in March 2026. The construction of Phase 2 is underway and operation is expected to begin by end-2027.
“We are tapping 100% use of reclaimed water to cool our data centres, not just as part of our sustainability initiative but also to ensure we do not use water reserved for consumption,” Yeo tells the media during a site visit in March.
Reclaimed water, also known as recycled or repurified water, is produced by cleaning municipal wastewater through a series of mechanical, biological and chemical processes. The reclaimed water can be used for landscape irrigation, toilet flushing or industrial processes.
Dennis Tan, managing director at Ocned Water Technology Sdn Bhd, which is ZData’s wastewater treatment consultant, observes that raw municipal wastewater goes through multiple processes to make reclaimed water suitable for use at data centres.
“The process begins with raw sewage, which is channelled into a treatment facility. It first undergoes physical processing, where large impurities such as solids, oil and grease are removed. The water then moves into biological processing, where organic matter, nutrients and suspended solids are broken down and removed using microorganisms,” he explains.
After that, the water undergoes biological and chemical conditioning, which includes aeration and pH adjustment to stabilise water quality. This is followed by a physical filtration process, typically using multimedia filtration systems, to further remove fine impurities and remaining particles.
Once treated, the reclaimed water is stored in a storage tank as high-purity water, suitable for use in cooling systems.
“The only challenge we find right now is figuring out the pressure to pump all this water to the data centre,” says Tan.
While the exact investment in WRPs and the process of treating raw wastewater are not disclosed, Yeo reveals that the company has invested several million US dollars to expand two WRPs.
“When speaking of using potable or reclaimed water, there is no significant difference in efficiency. As potable water is already clean and consistent, it’s easier and less risky to use with minimal additional treatment, while reclaimed water typically requires further filtration and chemical treatment to prevent issues such as corrosion and microbial growth that could affect cooling systems,” he says.
“The use of reclaimed water entails slightly higher costs compared with potable water. This is due to the added layers of treatment and infrastructure required to ensure the water meets the necessary quality standards for data centre cooling systems.”
“Over 17 data centres are currently in place [at Iskandar Puteri] and most of them are located in areas that have been officially gazetted, such as industrial zones.” – Pandak, Assemblyman
Addressing residents’ woes
In February, ZData came under scrutiny when more than 50 residents from housing areas in Iskandar Puteri, including Taman Nusantara Prima, Taman Nusa Bayu and Bayu Angkasa Apartments, gathered in front of the data centres’ construction site demanding an end to dust pollution and compensation for any negative impact that the project might have on their health.
Additionally, residents in the area expressed concerns that the facility will affect their water supply. Those gathered say they represent nearly 1,000 residents across the housing estates in the Gelang Patah district, which are located less than 1km from the construction site.
At the moment, Gelang Patah residents’ association chairman Ramli Paiman says the primary issue has been severe dust settling on homes and vehicles, to the extent that residents are unable to dry laundry outdoors. This has also been accompanied by growing health concerns, including respiratory issues such as breathing difficulties and asthma.
“As residents, our priority is to see both short- and long-term solutions to these projects. In the short term, we requested car wash facilities, which have been provided, and maybe health cost coverage as well. Over the longer term, we hope to see greater support for nearby schools, more community engagement and job creation. We do not want the data centres to focus solely on commercial operations,” he says.
To this, Datuk Pandak Ahmad, the state assemblyman for Kota Iskandar Puteri, says townhall sessions are being conducted in phases to hear the concerns of residents living near the data centre site in Gelang Patah.
“Over 17 data centres are currently in place [at Iskandar Puteri] and most of them are located in areas that have been officially gazetted, such as industrial zones. However, the one near Nusa Bayu that is affected, involving Tropicana Firstwide and the data centre project, is hilly and because of the terrain, it is sometimes difficult to avoid certain impacts,” he says.
Tropicana Corp Bhd’s (KL:TROP) wholly-owned subsidiary, Tropicana Firstwide Sdn Bhd, who is the land owner and master developer of the data centre projects, sold 38.527 acres of freehold land in Gelang Patah to Computility Technology for RM240 million in 2024 to build its data centre, according to Tropicana’s website.
Yeo says when the protest was first brought up, other than bringing the issue to the state government, they also spoke to Tropicana Firstwide for a solution, as the onus is on the land developer to conduct proper due diligence before any land for development is sold.
“The Environmental Impact Assessment is supposed to be done by the master developer [in this case, Tropicana Firstwide] before any land clearing is done. Since we are part of the parcel, we did our own due diligence and checked with the Department of Environment (DOE) if we could carry out the project, and we did get the confirmation to proceed,” he says.
To this, Tropicana tells ESG in an email response that it is currently undertaking essential master infrastructure works within the development area, including necessary earthworks to prepare the site for future infrastructure and utility implementation.
“These works are being carried out in accordance with relevant approvals and regulatory requirements. Appropriate environmental and site management measures are in place to manage dust and minimise potential impact on surrounding areas,” says Tropicana’s spokesman.
Meanwhile, Pandak says the first townhall session took place on Feb 12, which saw the attendance of the councillor and officers from Majlis Bandaraya Iskandar Puteri and the DOE, representatives from Tropicana Firstwide and ZData, as well as about 50 residents.
On mitigating dust pollution, Pandak says Tropicana Firstwide’s representative explained that they are conducting water spraying using several water bowsers and installing netting on the hillside slopes. The company also committed to covering exposed soil areas with green netting, which acts as a physical barrier against wind and prevents loose soil from being blown to nearby residential areas.
Pandak also says residents have urged Tropicana Firstwide to cover laundry costs as well as medical bills arising from air pollution.
“Currently, the developer has provided one free car wash facility, but this is insufficient and needs to be expanded. These proposals will be considered by Tropicana Firstwide, and the decision will be announced at the next townhall session in the near future,” he adds.
Tropicana’s spokesman says the company will continue reviewing opportunities to engage with the surrounding community and is committed to responsible development and maintaining an ongoing dialogue with residents, businesses and the relevant authorities as the project progresses.
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