Partner London
"Singapore has long been recognised as a regional hub for data centres, with a total capacity exceeding 1.4 GW."
Singapore has long been recognised as a regional hub for data centres, with a total capacity exceeding 1.4 GW. The sector is expected to grow significantly, reaching an estimated value of US$3.04bn by 2032, driven by a compound annual growth rate of 9.53%. As digital infrastructure becomes increasingly vital to economic growth, Singapore is positioning itself at the forefront of sustainable and resilient data centre development.
Strategic Vision and Government Support
Singapore’s government understands how vital data centres are to powering the digital economy. To support this, the Infocomm Media Development Authority (“IMDA”) is encouraging the growth of a forward-looking data centre sector – one that builds strong partnerships across the ecosystem and leads the way in energy-efficient innovation. These efforts aim to benefit not just Singapore but businesses across the region and beyond.
However, Singapore’s unique geography presents challenges. As a small, tropical city-state with limited land and natural resources, expanding the data centre industry sustainably is no easy task. To address this, the government is offering financial incentives to promote energy efficiency and is strengthening regulations to ensure data centres meet higher standards for resilience and sustainability.
Government incentives for data centres
To help data centres become more energy-efficient, the Singapore government has introduced a range of sustainability grants, incentives and support schemes. These aim to encourage operators to adopt top-tier technologies and best practices.
Collaboration is also a key focus. The government continues to highlight the importance of industry partnerships in driving innovation and improving energy performance.
In 2022, a Pilot Call for Application was published, that invited companies to propose data centre projects that could meet strict energy efficiency targets – specifically, a power usage effectiveness of 1.3 or better, along with optimised equipment use. Four operators were selected based on the strength of their proposals and were provisionally awarded around 80 MW of power to support their developments.
Key contacts
"The government continues to highlight the importance of industry partnerships in driving innovation and improving energy performance."
In June 2024, Singapore took a major step toward digital sustainability with the launch of the Green Data Centre Roadmap (“the Roadmap”). This initiative outlines how the country plans to grow its data centre capacity – adding at least 300 MW in the near term – whilst keeping environmental impact in check using green energy.
To achieve this, the government is working closely with the industry in two key areas:
- boosting energy efficiency at both hardware and software levels, encouraging the use of advanced technology to maximise performance and reduce energy use; and
- expanding the use of green energy and exploring how to scale its deployment across the sector.
The Roadmap also promotes collaboration across the entire ecosystem, recognising data centre operators as key players in forming partnerships with equipment makers, tech solution providers, academic institutions and end-users.
To support these efforts, the government offers financial schemes for projects that can deliver measurable carbon reductions. These include:
- the Resource Efficiency Grant for Emissions which co-funds costs like equipment, materials and technical software; and
- the Investment Allowance for Emissions Reduction which provides tax exemptions on qualifying capital expenses.
In December 2024, a new Energy Efficiency Grant was introduced specifically for eligible data centres. It helps operators purchase pre-approved energy-efficient IT equipment. SMEs can receive up to 70% of the equipment cost, whilst non-SMEs can get up to 30%, capped at S$30,000 per company.
Regulatory framework
"To strengthen Singapore’s digital infrastructure, the government has been actively updating laws and regulations to better support the data centre sector."
To strengthen Singapore’s digital infrastructure, the government has been actively updating laws and regulations to better support the data centre sector. These aim to ensure that data centres remain secure, resilient and aligned with the country’s digital economy goals.
One key law is the Personal Data Protection Act 2012 which governs how personal data is collected, used and shared. This applies to all data centres handling personal data of individuals in Singapore, regardless of where the company is based or incorporated.
Another major piece of legislation is the Cybersecurity Act 2018, updated in May 2024 through the Cybersecurity (Amendment) Act 2024. This legislation gives the Commissioner of Cybersecurity broader powers to oversee data centres that are considered “major foundational digital infrastructure.” If a data centre is designated as such, its operator must follow specific directions from the Commissioner, such as meeting technical standards, following codes of practice, and reporting cybersecurity incidents. They must also have systems in place to detect and respond to cyber threats.
In addition to legal updates, the IMDA released Advisory Guidelines on Resilience and Security of Data Centres in February 2025. These guidelines identify key risks – infrastructure failures, poor governance and cyberattacks – and recommend best practices to manage them. For example, data centre operators are encouraged to implement a Business Continuity Management System (“BCMS”) using a “Plan, Do, Check, Act” cycle to ensure they can maintain operations during disruptions.
The guidelines also advise data centres to manage third-party risks by conducting due diligence and setting up strong oversight procedures. Whilst currently voluntary and non-binding, the guidelines are expected to influence future regulations under the upcoming Digital Infrastructure Act, which will introduce stricter standards for cloud and data centre operators.
Sustainability Standards
Singapore is pioneering new benchmarks to encourage data centres to operate more sustainably. Two key standards have been introduced to support greener practices:
- Tropical Data Centre Standard: launched by IMDA in 2023, this is one of the world’s first standards designed specifically for data centres in tropical climates. It helps operators gradually raise their operating temperatures to 26°C or higher, which significantly reduces the energy needed for cooling. It is estimated that every 1°C increase could lead to energy savings of between 2-5%; and
- Green Mark for Data Centres: developed jointly by the Building and Construction Authority and IMDA, this certification recognises data centres that demonstrate strong environmental performance. It evaluates factors such as energy efficiency, sustainable design and construction, use of digital tools to optimise energy use, and the maintainability of mechanical and electrical systems.
"Looking ahead, IMDA plans to introduce additional standards to promote energy-efficient IT equipment and liquid cooling technologies."
Looking ahead, IMDA plans to introduce additional standards to promote energy-efficient IT equipment and liquid cooling technologies, further supporting the industry’s shift toward greener operations.
Challenges
Singapore’s data centre market faces a set of unique challenges that shape how the industry grows and innovates:
- high energy consumption: data centres are power-hungry facilities. As of 2021, they accounted for nearly 7% of Singapore’s total electricity use, a figure expected to rise to 12% by 2030. To support this growth while meeting the country’s net-zero emissions target by 2050, improving energy efficiency at both the facility and equipment level is essential;
- tropical climate: cooling is a major energy drain for data centres, especially in Singapore’s hot and humid environment. Around 40% of a data centre’s energy use typically goes toward cooling systems, making it more challenging to operate efficiently compared to cooler climates;
- limited land availability: Singapore’s small land area limits the development of large-scale, low-rise data centres. It also restricts the space available for renewable energy installations, which could help offset the carbon footprint of high energy use; and
- high operating costs: property prices and business expenses in Singapore are generally higher than in neighbouring countries. This has led some investors to explore alternatives like Malaysia and Indonesia, where costs are lower.
Despite these hurdles, Singapore is turning its constraints into opportunities. The government and industry players are investing in cutting-edge solutions to improve energy efficiency and set global standards.
"By embracing innovation and sustainability, Singapore is positioning itself as a global leader in green data centre services and standards."
One standout initiative is the Sustainable Tropical Data Centre Testbed, the world’s first research programme focussed on developing energy-efficient cooling technology tailored for tropical climates. Led by the National University of Singapore and Nanyang Technological University, and supported by the National Research Foundation, this programme aims to create new benchmarks for sustainable data centre operations in the tropics.
By embracing innovation and sustainability, Singapore is seeking to position itself as a global leader in green data centre services and standards.
Conclusion
Singapore’s data centre industry exemplifies how strategic planning, regulatory foresight, and innovation can overcome environmental and economic constraints. By championing green technology and resilient infrastructure, Singapore is not only securing its position as a regional data centre leader but also setting benchmarks for sustainability and efficiency worldwide.
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