Spanish utility Iberdrola and Irish firm Echelon Data Centres have entered into a joint venture to develop and operate data centre infrastructure in Spain, marking what the companies describe as the largest binding agreement of its kind in Europe between an energy provider and a data infrastructure developer.
Under the terms of the deal, Iberdrola will take a 20% stake in the joint venture via its subsidiary CPD4Green, with responsibilities including securing land with grid access and supplying round-the-clock renewable electricity. Echelon will hold the remaining 80% and oversee development, design, marketing, and daily operations.
The partnership’s first project, known as Madrid Sur, will be a 160,000-square metre facility capable of providing 144 megawatts (MW) of data processing power. The site already has a 230MW grid connection in place and is expected to begin operations before 2030. Construction is projected to create approximately 1,500 jobs. The centre’s energy needs, estimated at 1 terawatt-hour (TWh), will be met by an on-site photovoltaic plant and supplemented with additional clean power from Iberdrola.
“This agreement reinforces Iberdrola’s strategy of facilitating the development of data centres, which have already become a key vector for the growth in electricity demand,” said David Mesonero Molina, corporate development director at Iberdrola. “The alliance signed with Echelon will allow us to value our portfolio of sites with access to electricity connection and our ability to offer these infrastructures secure, clean and competitive energy 24 hours a day, 365 days a year.”
Echelon’s chief investment officer David Smith said the venture aligns with the company’s long-term strategy. “Spain has material benefits for our customers: access to large-scale renewable energy with some of the lowest prices in Europe and large construction and operation capacities,” he said. “Our partner, Iberdrola, is a global energy leader and we are delighted to have this opportunity to partner to offer the best data processing infrastructures to our customers.”
Echelon is backed by U.S.-based investment firm Starwood Capital Group, which manages around $115 billion in assets globally.
Iberdrola, which already supplies over 11TWh of electricity annually to technology companies and data centre operators worldwide, has expanded its focus on digital infrastructure through CPD4Green. The subsidiary currently has a Spanish site portfolio with capacity for 700MW and additional development potential of up to 5,000MW.
