Thailand Freezes 166 Data Centre Projects While It Writes the Rules

Thailand has halted construction on 49 data centres and frozen more than 117 pending applications while it writes national rules for the sector. The decision came out of a 4 September meeting of the national committee responsible for data centre policy, chaired by Finance Minister Ekniti Nitithanprapas, The Nation reported. The 35 data centres already operating are not paused, although the new minimum standards will apply to them after a period to adjust. Agencies have a month to draft new criteria and minimum standards, and operators were given a week to submit information about their facilities, according to The Register.

The scale matters. Officials pieced the picture together from 16 agencies: the projects under construction or awaiting permits were reported as totalling 166, against 35 in operation. That the count had to be assembled agency by agency is part of the story. The Register notes that Prime Minister Anutin Charnvirakul acknowledged the government lacked good data on how many facilities operate.

What Bangkok says it is fixing

The official explanation is mostly about process. Investors have had to collect approvals agency by agency, and the government says it has no consolidated view of what exists, what is coming or how much the country needs. The plan, as reported, is to:

• create a dedicated business category for data centres, with a one-stop approval mechanism
• set area-specific minimum standards covering economic, social and environmental impact
• split the work across four subcommittees: economic, infrastructure, sites and buildings, and environment
• evaluate future projects competitively, based on how much they benefit Thailand

The Register adds two details that matter more to operators. One is the idea of treating data centres that draw more than 2 MW as industrial businesses. The other is possible "resource utilisation fees". The Nation's account suggests the 2 MW line is far from settled: the meeting reportedly considered it very small and wanted to examine other factors before fixing a size threshold. The government has said explicitly that it does not intend to block foreign investment. A freeze on almost the entire pipeline is still a strong way of showing that.

Why this matters on our side of the border

Malaysia got here more slowly. In February, Anwar told Parliament that the government had begun limiting approvals for new data centres unrelated to AI or high-value technology about a year and a half to two years earlier. Johor has gone further, halting approvals for less water- and power-efficient Tier 1 and Tier 2 facilities, according to S&P Global's July assessment as reported by The Edge. Thailand is compressing the same correction into a single month.

The obvious first reaction is that Malaysia gains, because projects stalled in Thailand go elsewhere. I am sceptical that this happens quickly. Johor itself is almost full. Knight Frank data reported by the New Straits Times in August put Johor's co-location vacancy at 0.7%, against 23.3% in Bangkok, and the binding constraint in Johor is power and water, not investor interest. A data centre cannot change country quickly when its land, power agreement and tenant contracts are all local.

The more lasting effect is likely to be on regulation, not on capital flows. Two of Thailand's ideas look like templates Malaysian officials will study:

1. Resource fees. Charging large facilities directly for the strain they put on shared grid and water infrastructure is politically attractive in both countries, where household tariffs are a live issue.
2. Competitive, benefit-based approvals. Scoring projects on local jobs, local suppliers and local access to compute is close to what Malaysian ministers have been asking for informally.

What to watch

The draft criteria are due within the month. Watch where the industrial threshold lands, because at 2 MW it would catch far more than hyperscale campuses, including enterprise and edge facilities. Watch whether the resource fee is a flat levy or tied to efficiency, which would reward the efficient designs Johor is already pushing for. And watch whether any of the 49 paused projects is cancelled outright, not just delayed.

For teams in Malaysia that rely on regional capacity, the practical takeaway is not to plan a 2027 expansion around any single Southeast Asian market's approval pipeline. All of them are being rewritten at the same time.

---

Sources

• The Nation: Thailand halts data centre construction and approvals pending rules
• The Register: Thailand pauses all datacenter builds and approvals
• New Straits Times: Johor data centre boom hits capacity wall
• The Sun: Govt halts non-AI data centre approvals over energy, water concerns, says PM Anwar
• The Edge: Malaysian data centres need alternative funding for US$20b expansion, says S&P