At a glance
AirTrunk announced JHB2 in February 2025 at a design PUE of 1.25. Last week's financing release for the same campus targets 1.37.
A higher PUE means more electricity spent on everything that is not computing, so the disclosed energy efficiency target has loosened.
AirTrunk's FY25 report says it picks cooling equipment by "balancing the trade-off as far as possible between water use and energy efficiency".
Between the two announcements, Johor asked investors to defer water-cooled projects and then limited approvals to air-cooled ones.
The 1.37 figure clears the 1.4 warm-climate bar in AirTrunk's own Green Financing Framework, the standard its green loans are written against, by 0.03.
AirTrunk's Johor efficiency target moved from 1.25 to 1.37 in 17 months
AirTrunk's disclosed design for JHB2 has moved. In February 2025 the company said its Johor Bahru campus was built to a design PUE of 1.25. Last week it said JHB2 targets 1.37. PUE compares a site's total electricity draw to the electricity reaching its servers, so on AirTrunk's own figures the campus is now designed to spend more power on everything that is not computing, and to use less water doing it. AirTrunk then raised US$2.325 billion against JHB2 with water efficiency as one of the KPIs that adjusts the loan's margin. It has traded power for water in a state that has since stopped approving water-hungry data centres, and financed the water side of that trade with the largest single-asset loan in its history.
AirTrunk's FY25 sustainability report says it selects heat rejection equipment with "local water stress levels" in mind, "balancing the trade-off as far as possible between water use and energy efficiency". Trading energy for water is the company's stated design method.
The two disclosures sit 17 months apart. February 2025: JHB2 is "designed to meet the highest standards of efficiency and security, with a low design PUE (Power Usage Effectiveness) of 1.25", using liquid cooling, with treated greywater being scoped as a water supply. July 2026, announcing the green financing: JHB2 is "targeting a design Power Usage Effectiveness (PUE) of 1.37 and utilising advanced water-efficient cooling technology". The capacity figure did not change, and AirTrunk has published no explanation of the difference.
Between those two dates, Johor shut the door on water-cooled data centres. The state asked investors in November 2025 to defer water-cooled projects for at least 18 months, stopped approving its two most water-intensive classes of facility days later, and by March 2026 would approve only air-cooled ones. JHB2 was announced before all of it, so it was never assessed against those rules. Its water still has to come from Johor.
Campus, date disclosed | Design PUE | Cooling as described |
|---|---|---|
JHB1, August 2024 | 1.15 | Direct-to-chip liquid cooling alongside indirect evaporative cooling |
JHB2, February 2025 | 1.25 | Liquid cooling, treated greywater being scoped |
JHB2, July 2026 | 1.37 | Advanced water-efficient cooling technology |
Source: AirTrunk announcements, August 2024 to July 2026. Neither JHB2 figure states a load point or measurement standard.
JHB2's 1.37 clears AirTrunk's 1.4 green loan limit
AirTrunk's Green Financing Framework, dated April 2025, sets the efficiency bar its green loans are written against. For hot markets it requires an "annual PUE target of 1.4 for new data centres running at full capacity in warm climates", against 1.3 in cool climates. Johor is a warm climate, and JHB2's 1.37 clears that 1.4 threshold with 0.03 to spare. JPMorgan puts Malaysia's own regulatory efficiency bar at 1.4 against Singapore's 1.25 to 1.3, so the same number recurs at the national and the lender level.
Water efficiency is one of the framework's three eligible categories, alongside green data centre and renewable energy. Margin savings earned against the KPIs go to AirTrunk's social impact fund, which in Malaysia pays for recycled water programs in schools through Gravity Water and Water Watch Penang, disaster relief through MERCY Malaysia, and STEM education at Universiti Teknologi Malaysia.
AirTrunk says the loan is the first data centre financing in Asia-Pacific aligned with IFC's Guidelines for Blue Finance Version 2.0, the World Bank arm's standard for lending tied to water outcomes.
Portfolio PUE sits at 1.32 against a 1.23 to 1.28 goal
The FY25 report puts portfolio average annual operating PUE at 1.32, against a stated long-term goal of "1.23 to 1.28 annual average operating PUE". Portfolio water usage effectiveness improved to 0.89 litres per kilowatt hour in FY25 from 0.97 the year before, and 55% of portfolio water use was recycled supply. Water intensity fell while PUE sat above the company's own target band.
On the measured numbers AirTrunk runs well ahead of its peers. Uptime Institute's global average operating PUE fell from 2.5 in 2007 to 1.65 by 2014 and has sat in a 1.55 to 1.59 band since 2020, so a portfolio at 1.32 is a strong result. AirTrunk's own Johor design figures of 1.15 and 1.25 also sit well below its measured portfolio average of 1.32, which is the ordinary distance between a modelled design number and delivered operation, and the reason a figure stated at announcement carries less weight than one stated at financial close.
The report states no design or operating PUE for JHB1, JHB2 or Malaysia, and no restated figure for JHB2 appears in it.
Johor closed off water-cooled expansion in four steps
Malaysia's National Water Services Commission issued guidelines in September 2025 that, on The Star's account, "prioritise using reclaimed water for cooling if it is available, or installing air-cooled systems with zero discharge". Johor's state executive councillor for investment and trade, Lee Ting Han, then asked data centre investors on 18 November 2025 to defer water-cooled expansion projects for at least 18 months.
Days later the state said it would stop approving Tier 1 and Tier 2 data centres, the two most water-intensive bands in its classification. By 5 January 2026 it was applying "Singapore-level water efficiency" benchmarks before approving any project. Menteri Besar Datuk Onn Hafiz Ghazi set the current position on 10 March 2026, saying the state would approve only Tier 3 and Tier 4 projects using air cooling and that "if a data centre demands a high intake of water, we will not approve it".
JHB2 was announced nine months before the first of those steps, so it was never assessed against them. Its water still has to come from Johor. AirTrunk agreed in April 2025 to develop a recycled water supply scheme with Johor Special Water, a state-owned venture, serving JHB1 and JHB2.
Water efficiency and energy efficiency pull against each other
The Uptime Institute's research director of sustainability, Jay Dietrich, wrote in May 2025 that "in water-rich locations, a water-cooled heat rejection system typically offers the most energy-efficient cooling system", and that in areas of water stress "data center designs should prioritize dry free cooling and mechanical cooling modes, using minimal (e.g., peak shaving) to no water". Johor is the second case.
Evaporative cooling sheds heat by evaporating water, which takes less electricity than chilling air mechanically, so moving off it has historically cost power. Dietrich records that the gap has narrowed: dry and refrigerant-based systems once carried "a much higher TCO due to their greater energy consumption" and now reach comparable ten-year total cost of ownership. The penalty for taking water out is real in direction and smaller than it was.
Heat rejection is also a different part of the system from the liquid cooling AirTrunk named in 2025. Direct-to-chip liquid cooling moves heat off the processor into a building loop and consumes almost no water itself. JHB1 ran it alongside indirect evaporative cooling, which does consume water, so JHB1's 1.15 was achieved with water in the loop.
Neither JHB2 figure states its load point or measurement standard, and AirTrunk's own framework cites a Singapore scheme where the same building scores 1.39 at 25% load and 1.28 at 100%, a spread of 0.11 from load point alone. A change in basis could account for much of the 0.12 gap. Design figures given at announcement are modelled on assumed equipment, climate and load.
Six of the eight banks arranging SYD3 also coordinated JHB2
Thirty institutions funded JHB2 behind ten global coordinators: BNP Paribas, Crédit Agricole CIB, DBS, ING, Mizuho, MUFG, Société Générale, Sumitomo Mitsui Banking Corporation, HSBC and United Overseas Bank. Bloomberg reported on 22 July that Blackstone was tying up A$4.3 billion for AirTrunk's SYD3 campus in Sydney with eight lenders: Crédit Agricole, DBS, Deutsche Bank, HSBC, ING, MUFG, Morgan Stanley and United Overseas Bank.
All but Deutsche Bank and Morgan Stanley coordinated JHB2 as well, so the same relationship banks are reading AirTrunk's efficiency disclosures on both sides of its 2026 asset-level borrowing. Its A$16 billion August 2025 refinancing already carried energy and water KPIs across Australian assets.
Australian water conditions are softer than Johor's and they are moving. AWS and Greater Western Water agreed to cool a western Melbourne data centre with recycled water from day one in a Victorian first.
What to watch
SYD3. Whether the A$4.3 billion facility closes as a green loan on the same KPIs, and what PUE it is written against under the 1.3 cool-climate limb of AirTrunk's framework.
JHB3 and JHB4. AirTrunk announced the two campuses on 30 April 2026 at RM12 billion for more than 280MW, describing "advanced cooling systems that utilise 100 per cent recycled water" and publishing no PUE figure, taking its disclosed Malaysian commitment to RM27 billion across four campuses.
Johor's benchmarks. The state has applied "Singapore-level water efficiency" scrutiny since January 2026 without publishing a numerical threshold, so operator disclosures and lender KPIs are the only public numbers in the market.