A new Policy Note by Centre for a Smart Future (CSF) argues that the Sri Lankan government’s new plans to encourage AI data centres must be carefully considered alongside constraints to water, electricity and land, given the high resource intensity typically seen with data centres around the world.
As Sri Lanka positions itself to gain a competitive edge in the global AI economy, data centre development is increasingly seen as an engine of technological progress. Yet behind this promise lies a less visible reality: this expansion depends on resources that underpin everyday life – electricity, water, and land. CSF’s Policy Note, ‘A Resource Reality Check for Sri Lanka’s AI Data Centre Ambition’, brings this reality to the fore by asking what such infrastructure would mean in a resource-constrained island.
CSF examined the experience of countries that embraced data centre investments early. It finds that across the US, Europe, Latin America and closer to home in India and Singapore, inadequate planning led to overwhelmed electricity grids, dependence on fossil fuels, cost shocks for households, water shortages, and community pushback over land use.
The findings are especially timely as Sri Lanka charts its economic recovery path. While much attention has focused on attracting foreign investment and accelerating digitisation, discussions have largely overlooked the country’s fragile resource base. These resource vulnerabilities are felt most acutely in daily life; rising electricity costs, stretched water systems, and opaque land allocation have burdened households and deepened mistrust among communities.
The Note points to policy approaches abroad that inspire ideas for Sri Lanka. Clear efficiency standards, consumer protection regulations, resource‑sensitive design, and data‑driven land assessments demonstrate that Sri Lanka has options. The Note urges a measured, forward‑looking approach to data centres – one that keeps the country’s resource security and community wellbeing at the centre of Sri Lanka’s digital ambitions.
