Water shortage won't hinder Visakhapatnam data centre growth: Naidu

Andhra Pradesh Chief Minister N Chandrababu Naidu on Friday assured the industry that water shortage would not be a bottleneck to setting up data centres in Visakhapatnam, asserting that the state has sufficient resources and alternative technologies to meet their requirements.

This comes as over 6 gigawatts (GW) of hyperscale data centre capacity is at various stages of execution in Visakhapatnam, including Google's massive $15 billion, 1-gigawatt AI data centre and digital hub. Naidu said the proposed facilities would require around 3.5 TMC (thousand million cubic feet) of water, while the state could bring up to 100 TMC of water to Visakhapatnam annually through the Polavaram project. This is a multipurpose irrigation project on the Godavari River that is expected to be operational by March 2027.

Other major projects include ReNew Energy Global Plc, which on Thursday announced that it would establish a 1 GW green hyperscale data centre in Anakapalli near Vizag with an investment of ₹67,000 crore. Last year, Reliance Industries had also announced an $11 billion plan through its joint venture Digital Connexion to build a 1 GW AI-ready data centre park in Visakhapatnam. This is likely to be the country's largest single-location project in the sector.

It should be noted that these projects are coming at a time when a JLL report indicated that India's data centre capacity is set to triple from 1.6 GW now to 6 GW by 2029, positioning the nation as Asia's fastest-growing digital infrastructure market. This indicates the importance of Vizag in India's data centre space.

Addressing a fireside chat at the 31st CII Partnership Summit in Visakhapatnam, Naidu said water availability would not be an obstacle and data centres would generate opportunities beyond direct employment by creating a wider ecosystem around artificial intelligence, the knowledge economy and data-driven decision-making.

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He noted that substantial quantities of water currently flow into the sea and could be utilised. He also pointed to desalination and emerging air-cooling technologies as alternatives to address water requirements. Dismissing concerns over water availability, he maintained that resource constraints would not hinder the state's data centre ambitions.

Later in the day, Naidu batted for the Godavari-Cauvery river interlinking project, stating that it would bring a permanent solution to chronic water shortages, droughts and floods across South India. He added that this would bring an end to interstate water disputes between states like Karnataka, Tamil Nadu, Andhra Pradesh and Telangana.

"I am ready to work for Godavari-Cauvery linkage. One solution to the water crisis -- Polavaram will come into effect by March 2027. With this linkage, water wars in four states will be over," he added.