“As the demand for digital and AI compute continues to rise, the need for data center capacity will grow,” Senior Minister of State for Communications and Information Janil Puthucheary said on Thursday.

The roadmap aims to provide at least 300 megawatts of additional capacity in the near term, with more through “green energy deployments.”

Plans to provide additional data center capacity include raising energy efficiency of all data centers in Singapore, deploying energy-efficient IT equipment as well as offering incentives or grants for resource efficiency.

“Data centers here also tap on Singapore’s broader international position as a business and digital hub,” Singapore’s Infocomm Media Development Authority said in a press release. IMDA promotes and regulates Singapore’s communication and media sectors.

“As demand for AI has grown, so too has demand for energy. This has created strains on national energy networks, which need to be managed in the short term,” Tony Blair Institute for Global Change said in a report on Wednesday.

The AI boom has boosted demand for data centers which house large amounts of data required to train and deploy AI models, making them extremely energy intensive.

While companies like Microsoft and Google are investing heavily to increase the use of clean energy, governments need to continue to create the incentives for companies to do so, said the Tony Blair Institute for Global Change.

Data centers are the “biggest indirect carbon emitter” of the information and communications sector, said Puthucheary. “They contribute to 82% of Singapore’s ICT sector emissions, and account for 7% of Singapore’s total electricity consumption.”

Singapore is the second-largest data center market in Southeast Asia and the sixth-largest in Asia-Pacific, according to data from global real estate services firm Cushman & Wakefield.

Singapore houses more than 70 cloud, enterprise, and co-location data centers, which is able to host cloud platforms, digital services, and higher-intensity workloads for AI, according to IMDA.

As the global data center market hits new highs in 2023, power limitations have “pushed data center operators to further evaluate untapped and smaller markets worldwide,” said Cushman & Wakefield.