South-East Asia accounts for roughly half of the Asia Pacific region's datacentre capacity currently under construction, driven by the global boom in artificial intelligence. However, governments in Thailand and Indonesia have recently paused dozens of development projects over missing permits, monitoring details, and environmental assessments. With facilities draining local resources, policymakers are reconsidering standard utility rates, including proposals in Thailand to place datacentres under higher electricity tariffs.
Key points
Resource constraints are forcing South-East Asian authorities to enforce stricter oversig…: Resource constraints are forcing South-East Asian authorities to enforce stricter oversight on datacentre infrastructure.
Investment that previously migrated away from Singapore's tight restrictions is now encou…: Investment that previously migrated away from Singapore's tight restrictions is now encountering grid bottlenecks across neighboring emerging markets.
Heavy reliance on expensive imported gas has prompted Thai officials to push for separate…: Heavy reliance on expensive imported gas has prompted Thai officials to push for separate, higher electricity tariffs on datacentres.
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In early 2026, Thailand’s datacentre industry was on a roll. The country’s board of investment had recently announced approval of datacentre projects from Tiktok, a UAE-based Skyline datacentre and Singapore’s Bridge datacentres, totalling a planned investment of $27bn.
As the year has passed, however, what once seemed like a new industrial juggernaut has ground to a halt. Thailand paused construction on 49 projects and approval decisions on 117 more in September 2026, amidst growing concern about the lack of sufficient details for regulation and monitoring. It is not alone in reconsidering datacentre projects. In neighbouring Indonesia, the governor of the country’s most populous province of West Java halted construction on a datacentre due to lack of permits and an incomplete environmental assessment process.
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