Singapore’s green data center roadmap is unlikely to bring digital infrastructure investment back to the country, a new report argues.

The roadmap, announced last week, aims to unlock 300MW of capacity in existing data centers by making them more energy efficient.

Singapore wants to unlock more data center capacity – Getty Images/BardoczPeter

A moratorium on new data center projects has been in place in Singapore since 2019, and as a result, developers have focused their efforts elsewhere.

However, a report from financial analysts BMI says the announcement of the roadmap is unlikely to sway investors.

“Our core view is that large-scale data center capacity investments are unlikely to go back to Singapore as a result of global key trends in the industry and momentum held by neighboring markets, primarily Malaysia,” the BMI report says.

It points out that many Singaporean businesses have moved workloads to data centers in Malaysia and Indonesia.

“This would greatly explain the surging volumes of data center investments received by Johor (over 1,800MW) and Batam (285MW),” the report said.

“The two zones' proximity to Singapore, as well as favorable structural conditions such as regulation, electricity prices, and labor costs have prompted a rapid migration outside Singapore.”

The moratorium has been relaxed slightly in recent years, with Equinix, Microsoft, AirTrunk, and GDS given permission to add 80MW of new capacity.

But the BMI report says that this, plus the 300MW promised in the green roadmap, will not be sufficient to meet the requirements of end users.

“This would bring total capacity available for future developments to 380MW, but we believe this may prove too little for the current Southeast Asian data center IT load requirements,” the report said.

It added: “We believe it is unlikely that the initiative will rekindle large-scale foreign investor interest in the Singaporean data center market since neighboring emerging markets are expecting over 2,500MW of data center capacity in the near term.”

Promoted by Singapore’s Infocomm Media Development Authority (IMDA) the roadmap aims to provide “at least 300MW of additional capacity in the near term,” and promises more in the future through green energy deployments.

The IDMA says it will achieve this by partnering with companies to reduce the current energy usage of data center equipment and hardware in existing facilities to unlock more capacity.

It will also look at deploying new technologies such as liquid cooling in place of older air cooling systems.

“Our goal is to both meet our climate commitments and provide at least 300MW of additional capacity in the near term, or more with green energy deployments,” Deputy Prime Minister Heng Swee Keat said when the plan was announced.