Eco-friendly data centers help drive $6.3 billion of green investment in Southeast Asia, but report shows more needed

Southeast Asia saw a significant uptick in green investments in 2023, with a boost from green data center projects, though funding remains insufficient, according to a report released Monday. 

The analysis, conducted by Bain & Company, GenZero, Standard Chartered and Temasek, found that $6.3 billion of green investments flowed into the region, representing a 21% year-on-year increase. 

While renewable energy remained the region's primary green investment theme in 2023, green data center projects — aided by efficiency policies in countries like Malaysia and Singapore — drove the largest gains from the previous year, according to the report.

Demand for data centers has surged with the emergence of new, data-intensive technologies such as generative AI, leading to warnings of increased energy consumption. 

According to a January report from the International Energy Agency, the AI industry's energy consumption is expected to grow by at least ten times between 2023 and 2026.

Malaysia and Singapore were among Southeast Asian governments that helped push major investments towards these green data centers, which aim to be more energy efficient and less reliant on fossil fuels. 

Last year, Malaysia attracted large-scale green financing of over $500 million for at least two data centers, according to the Monday report. The financing for the projects helped the country make the biggest year-over-year jump in green investments out of all countries in the region, up 326% from 2022. 

Meanwhile, Singapore's largest telecommunications company, Singtel, secured a 535 million Singapore dollar ($401 million) five-year green loan aimed at improving efficiency at all of its data centers, including an upcoming 58 MW green data center, which began