Air Selangor AWS Partnership Marks Klang Valley’s First Integrated Reclaimed Water Supply Chain for Data Centres

KUALA LUMPUR (Nov 13): In a major step toward sustainable data centre operations, three landmark agreements were formalised on Thursday to establish the Klang Valley’s first fully integrated reclaimed-water supply chain. The signing ceremony, witnessed by the Ministry of Energy Transition and Water Transformation (Petra), highlights Malaysia’s push to support rapid data centre expansion while mitigating pressure on existing water resources.

The agreements involve Air Selangor, Amazon Web Services (AWS), Indah Water Konsortium (IWK) and Central Water Reclamation Sdn Bhd (CWR), and were officiated in the presence of Deputy Prime Minister and Petra Minister Datuk Seri Fadillah Yusof, Selangor Menteri Besar Datuk Seri Amirudin Shari, and AWS Asia-Pacific data centre operations director Dr Saji PK.

This initiative comes at a time when Malaysia—particularly key clusters across industrial land in Selangor, commercial property in KL, and high-demand areas near office space in Bukit Jalil, factory hubs in Puchong, and industrial property in the Subang area—has seen a surge of water-intensive data centre investments over the last three years. The growing concentration of hyperscalers has intensified calls for alternative water sources, including reclaimed water, recycled effluent and rainwater harvesting.

Three Agreements Establish a Full Reclaimed-Water Supply Ecosystem

Under the first agreement, Air Selangor will deliver industrial-grade reclaimed water to AWS—making AWS the first data centre operator in the Klang Valley to adopt reclaimed water for cooling operations.

The second agreement formalises a bulk reclaimed-water supply arrangement between Air Selangor and CWR. CWR, a joint venture between Air Selangor and IWK, will oversee production and distribution via a dedicated reclamation facility.

The third agreement involves IWK supplying treated effluent to CWR, which will then process it into reclaimed water suitable for industrial use.

Fadillah said the collaboration showcases the effectiveness of pairing federal policy direction with state-led implementation, and aligns with Petra’s Water Sector Transformation 2040 (AIR 2040), which positions treated effluent as a viable renewable resource for long-term water resilience.

Future Policy Framework to Support Industry Adoption

To encourage broader use of reclaimed water among Malaysia’s rapidly expanding data centre sector, Petra is refining the legal and policy frameworks governing reclaimed-water use. This forms part of the country’s broader decarbonisation efforts, which include mechanisms such as the Corporate Renewable Energy Supply Scheme (CRESS), Green Electricity Tariff (GET), and self-consumption rooftop solar pathways.

Malaysia has become one of Asia’s most active data centre investment destinations, supported by strong connectivity, available industrial land and improved power infrastructure. However, the water-intensive cooling requirements of hyperscale operations have raised concerns on long-term sustainability—making initiatives like the AWS-Air Selangor partnership crucial for the sector’s future.