Sri Lanka’s Data Centre Ambitions: A Cost-Benefit Reality Check 📈

• Overall Investment: The government has proposed a data centre hub, allocating Rs. 500 million (US$ 1.6 million) in the 2026 budget. However, critics highlight this is significantly lower than regional benchmarks, such as Vietnam’s average construction cost of US$ 6.9 million per megawatt. • Current Infrastructure: Sri Lanka currently operates six Tier III data centres serving the domestic market. Transitioning to Tier IV (99.995% uptime) is deemed unfeasible for at least two years until electricity sector reforms are finalized to ensure power isolation and redundancy. • Economic Concerns & Risks: • Employment: High-tech data centres are not major job creators; for example, Bangladesh’s Tier IV facility created only 69 jobs. • Utility Costs: Significant resource consumption is noted, including 2 million liters of water required for some facilities, presenting high opportunity costs for other sectors. • Sustainability & Obsolescence: Concerns exist regarding silicon-based architecture becoming obsolete with future shifts toward quantum or biological computing, potentially leaving current investments stranded. • Comparison with Vietnam: Vietnam’s more developed ICT landscape includes 34 active data centres and a US$ 38.4 billion National Data Development Fund, highlighting the significant scale of investment required to compete as a regional hub.