Singapore Lifts Data Centre Moratorium with Strict Sustainability Requirements

Singapore's Infocomm Media Development Authority (IMDA) has officially ended the city-state's multi-year moratorium on new data centre construction, announcing conditional approvals for four facilities totaling approximately 120 MW of IT load. The projects were selected from over 30 applications in a competitive process that prioritised sustainability, energy efficiency, and economic contribution. Every approved project must meet stringent criteria including a power usage effectiveness (PUE) of 1.3 or below, procurement of 100% renewable energy certificates, liquid cooling for at least 60% of IT load, and demonstrated plans for waste heat recovery.

The approved operators include a joint venture between ST Telemedia and a Middle Eastern sovereign fund, a facility by Keppel DC REIT in the Tuas industrial zone, and two developments by undisclosed international operators. AirTrunk, which broke ground on a separate 60 MW facility in the Jurong Innovation District, was among the earliest post-moratorium approvals. Digital Realty has also announced plans targeting nearly S$7 billion (US$5 billion) of total investment in the Singapore region.

The moratorium, originally imposed in 2019, was a response to concerns that data centres were consuming a disproportionate share of Singapore's limited electricity supply and land. At the time of the pause, data centres accounted for approximately 7% of Singapore's total electricity consumption - a figure that had been growing at 10-15% annually. The island nation, with only 730 square kilometres of total land area and no domestic fossil fuel resources, faced a genuine constraint that other markets have not yet encountered.

The approved 120 MW of new capacity, however, falls far short of estimated demand. Consultancy Structure Research estimates over 500 MW of unmet requirements in the Singapore market, and the post-moratorium application process was heavily oversubscribed. This supply-demand imbalance has had significant ripple effects across Southeast Asia, pushing operators to seek alternatives in neighbouring markets - particularly Johor Bahru in southern Malaysia, where DayOne Data Centers has committed MYR 28 billion ($7 billion) and Vantage has launched its fourth Malaysian facility.

Singapore's approach may become a template for other land- and power-constrained markets. By limiting new approvals to facilities that meet the highest sustainability standards, the government is effectively creating a premium tier of "green" data centres that can command higher lease rates while minimising environmental impact. The requirement for liquid cooling in particular signals that Singapore views this technology as essential rather than optional - a position that aligns with the industry-wide shift driven by AI workload thermal demands.

For operators and investors, the key takeaway is that Singapore's market will remain supply-constrained for the foreseeable future, supporting premium pricing and high occupancy rates. The limited new supply also means that existing Singapore facilities have become even more valuable - contributing to the trend of data centre asset valuations in the city-state reaching some of the highest per-MW figures globally.