Why Are Australia, India, Malaysia, Indonesia, and Thailand Becoming APAC's Next Sustainable Data Center Hotspots?
The APAC sustainable data center market is undergoing a significant shift as rapid growth in cloud computing, AI workloads, digital services, and enterprise digitalization continues to expand digital infrastructure across the region. While China, Japan, and Singapore remain established data center hubs, sustainable data center activity is increasingly gaining momentum in Australia, India, Malaysia, Indonesia, and Thailand.
These markets are attracting growing attention through renewable energy development, sustainable power procurement, green financing, and government initiatives supporting green digital infrastructure. This shift is taking place as the APAC sustainable data center market continues to expand, with the market valued at USD 16.74 billion in 2025 and expected to reach USD 57.18 billion by 2031, growing at a CAGR of 15.43%.
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India: Renewable Energy and Green Financing Support Sustainable Growth
India is emerging as a major sustainable data center market, supported by strong hyperscaler and colocation investment alongside growing renewable energy and green financing activity.
Major players, including Google, AWS, Microsoft, Apple, and AdaniConneX, are increasingly integrating renewable power, carbon removal, green loans, and energy-efficient infrastructure into their expansion strategies, positioning sustainability as a core driver of data center development.
Mumbai, Navi Mumbai, Hyderabad, Chennai, and Pune remain key data center hubs in India, attracting significant investments from major colocation providers, including ST Telemedia Global Data Centres, NTT DATA, CtrlS Datacenters, Equinix, Sify Technologies, and Nxtra by Airtel.
Microsoft's carbon removal agreement with Indian climate-tech company Varaha further reflects the growing focus on sustainability initiatives in the country. Meanwhile, Nxtra by Airtel achieved 49% renewable energy usage across its core data centers in FY 2025 as part of its broader sustainability strategy.
Australia: Renewable Energy Creates Favorable Conditions for Sustainable Data Center Growth
Australia's strong renewable energy base is creating favorable conditions for sustainable data center development. Renewables account for approximately 52% of the country's power mix, with solar and wind providing data center operators with greater opportunities to procure renewable electricity, reduce carbon emissions, and support low-carbon infrastructure.
In June 2025, Amazon announced its decision to invest $12.97 billion over the next five years to expand its data center operations in Australia. The investment will also support solar farms in Victoria and Queensland to help generate the large amounts of energy required for data centers in Melbourne and Sydney.
Apple has also expanded its renewable energy portfolio in Australia through an agreement with European Energy to offtake power from the 80 MW Lancaster Solar Farm in Victoria. The project supports Apple's goal of adding more than 1 million MWh of renewable electricity to Australia's National Electricity Market by 2030.
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Malaysia: Johor Gains Momentum as a Sustainable Hyperscale Hub
Malaysia is attracting significant investment in sustainable data center infrastructure, with developers and investors focusing on green financing, resource-efficient technologies, renewable energy integration, and environmentally certified facilities.
Johor is rapidly emerging as Southeast Asia's leading data center hub, leveraging its proximity to Singapore to attract AI-driven investments. It is projected to account for nearly 60% of Malaysia's total data center capacity by 2030, while also gaining prominence as a cost-effective alternative to Singapore.
In April 2026, the Asian Infrastructure Investment Bank approved $125 million in financing for Epoch Digital, the portfolio company of Actis, to develop the first phase of a green hyperscale data center in Malaysia. The initial 60 MW facility is part of a planned 120 MW campus and is fully contracted under an off-take agreement with BytePlus.
Renewable PPAs are also becoming increasingly important, with GDS Holdings signing a long-term PPA with Cenergi SEA Berhad to supply renewable power to its Johor data center campus. Such agreements highlight the growing role of renewable power procurement in Malaysia's digital infrastructure development.
Indonesia: Clean Energy and Green Data Center Development Gain Support
Indonesia is emerging as a key market for sustainable digital infrastructure, with data center developers focusing on cleaner power sources, advanced cooling solutions, and green investment models.
Recent projects highlight a growing transition toward renewable-powered facilities, supported by strategic partnerships, battery storage deployment, and sustainability-linked financing.
Sustainability Economics signed an MoU with Bali's INZET Foundation to support the development of clean energy-powered AI data centers and renewable energy infrastructure in the province. The partnership will explore the integration of AI cloud data centers with renewable energy sources, including solar, wind, batteries, biomass, hydrogen, and other low-carbon technologies.
Government support is also increasing. In 2025, Indonesia's Ministry of National Development Planning announced plans to partner with private-sector investors through a Public-Private Partnership framework to develop green data centers. The initiative aims to combine digital infrastructure growth with sustainability objectives while considering regulatory simplification and incentives to attract investment in renewable energy-powered data center projects.
Thailand: Direct Renewable Energy Access Supports Future Investment
Thailand's data center sector is entering a new phase of growth, with renewable energy access and sustainable infrastructure becoming key drivers for investment. Strong policy support and green financing are enabling the country to build a competitive and future-ready digital ecosystem.
Thailand's Energy Regulatory Commission has introduced a draft Direct Power Purchase Agreement framework that allows BOI-promoted data centers to purchase 100% renewable electricity directly from eligible renewable energy producers, with power delivered through the national grid.
The policy is expected to enhance Thailand's attractiveness for hyperscale data center investments by providing long-term access to renewable energy and enabling operators to meet corporate sustainability targets.
To support Thailand's expanding digital infrastructure and data center investments, the Ministry of Energy has revised its Power Development Plan around three key objectives: ensuring energy security, increasing renewable electricity to at least 50% by 2037, and enhancing cost competitiveness while cutting power sector carbon emissions by 30%–40%.
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Why Is the Market Shifting?
The growing sustainable data center activity in Australia, India, Malaysia, Indonesia, and Thailand is supported by different developments across each market. Australia has a strong renewable energy base, while India is seeing increasing hyperscaler and colocation investment alongside renewable energy, green financing, carbon removal, and energy-efficient infrastructure initiatives. Malaysia is attracting investment through green financing, renewable energy integration, and long-term renewable PPAs, while private-sector partnerships and government initiatives are supporting renewable-powered data center development in Indonesia. In Thailand, the proposed Direct PPA framework could enable eligible data centers to directly procure 100% renewable electricity. These developments are contributing to the growing role of these markets in APAC's sustainable data center landscape alongside established hubs such as China, Japan, and Singapore.
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Source: Arizton Advisory & Intelligence