TECO's Strategic Acquisition of NCL Energy Marks Entry into Southeast Asia's Data Center Market

TECO Electric Enters Southeast Asia's Data Center Market

On March 19, 2025, TECO Electric & Machinery Co. executed a significant acquisition by signing an agreement to purchase an 80% stake in Malaysia's NCL Energy Sdn Bhd. This move positions TECO as the largest shareholder of the MEP engineering firm, significantly advancing its footprint in Southeast Asia’s burgeoning data center market.

The acquisition ceremony, held in the vibrant city of Kuala Lumpur, signals a calculated effort by TECO to leverage Malaysia's favorable investment landscape in the data center sector. According to TECO Chairman Morris Li, Malaysia is experiencing a surge in power infrastructure initiatives and renewable energy policies, making it an attractive location for data center investments. The country boasts low electricity costs, ample land availability, and a strategic proximity to Singapore, which is crucial for attracting major tech investments.

TECO's decision to enter the MEP engineering service market aligns with current market dynamics, as Malaysia has become home to the highest number of new data centers in Southeast Asia. With global technology giants like Google, Microsoft, and Amazon Web Services making substantial investments in the region, TECO's acquisition affirms its commitment to boost its engagement in the Southeast Asian market.

Prior to this acquisition, TECO's board of directors approved the investment of up to MYR 70 million, targeting not only NCL Energy but also its renewable energy branch, NCL Green Energy. This transaction is expected to be finalized by the second quarter of 2025. TECO's Intelligence Energy Business Group, known for its collaborative experience in building data centers for international cloud computing leaders in Taiwan and Singapore, will play a pivotal role post-acquisition.

NCL has maintained a robust working relationship with Tenaga Nasional Berhad, Malaysia's electricity company, for nearly two decades, establishing itself as a trusted player in MEP and solar engineering. The founder of NCL, Dato' Ng Keng Hiong, expressed enthusiasm about joining the TECO family, emphasizing the company’s expertise and shared vision.

Notably, NCL has previously collaborated with TECO on two hyperscale data center projects, cementing their operational synergy and strengthening their market position. This collaboration showcases the type of rapid integration TECO anticipates, harnessing NCL's established licenses and skilled workforce to quickly adapt and meet local demands in the engineering sector.

Morris Li further commented on the larger picture, suggesting that entering Malaysia's data center MEP engineering market is merely a foundational step. The company has expansive plans, eyeing expansions into renewable energy solutions such as solar power plants, battery energy storage systems (BESS), electric vehicle (EV) charging stations, and MEP equipment sales in the coming years. The strategic goal is to stimulate overseas revenue, projecting a significant uptick to over 50% within the next two to three years.

As the data center ecosystem continues to evolve, Malaysia stands at the forefront, with expectations of surpassing $20 billion in foreign investments for data center development over the next five years. TECO's proactive measures to engage with top Malaysian EPC contractors like Gamuda and Sunway will enable it to present comprehensive MEP services to international clients, ultimately meeting the increasing demands for cloud computing infrastructure.

This acquisition and its subsequent initiatives underscore TECO's vision of fostering electrification, intelligence, and green energy solutions, positioning the company as a formidable player in Southeast Asia's energy and technology landscape.