Echelon & Iberdrola invest EUR €2 billion in Spanish data centres
Echelon Data Centres has announced a EUR €2 billion investment to construct hyperscale data centre infrastructure in Spain through a joint venture with Iberdrola.
The agreement forms part of a broader strategic plan to expand Echelon's international presence, responding to rising demand for cloud and artificial intelligence services. Under the terms of the arrangement, Echelon will handle planning, design, commercialisation and management of the data centres, while Iberdrola will focus on land acquisition and ensuring a reliable renewable power supply.
Joint venture details
The joint venture sees Echelon retain an 80% ownership interest and Iberdrola 20%, with Iberdrola's share managed through its digital infrastructure unit, CPD4Green. The partnership's first project, titled Madrid South, involves a 160,000 sqm data centre campus on the outskirts of Madrid, which is expected to provide up to 150 MW of capacity upon becoming operational by 2030.
The Madrid South site has already secured a power connection close to 230 MW. The plan includes the integration of an on-site solar photovoltaic facility, supplemented by additional renewable energy sourced from Iberdrola, to supply the data centre's full energy requirements.
Echelon Data Centres currently has over 600 MW of capacity either operational or in planning stages across Ireland and the UK. CPD4Green, a subsidiary of Iberdrola, has more than 700 MW power connection agreements in place at sites in the Madrid area and Aragon.
Sustainability commitments
Echelon and Iberdrola have stated that all power required by the Spanish data centre facilities will be provided by renewable energy, aligning with the sustainability objectives of both companies and the EU's Climate Neutral Data Centre Pact. The alliance is described as underpinned by guarantees to generate and consume renewable energy for the ongoing operation of the facilities.
The joint initiative has been established to support the increasing demands for secure, environmentally-responsible digital infrastructure in Spain, while also facilitating the long-term development of renewable power generation capacity in the region.
Market context and objectives
The partnership is expected to benefit from Spain's regulatory structure, access to skilled labour and competitive renewable energy prices. This is expected to support the large-scale delivery and ongoing operation of data centre infrastructure for cloud and artificial intelligence workloads.
David Smith, Chief Investment Officer at Echelon Data Centres, commented on the partnership and its anticipated impact for Echelon customers operating in Spain.
"Entering the Spanish data centre market has been a strategic goal for Echelon for several years. Spain has material benefits as a market for our customers; a supportive regulatory and policy environment, high quality talent from both a construction and operational perspective and access to some of Europe's lowest price renewable energy, in scale. Our partner, Iberdrola, is a world leader in building and operating generation assets and we are delighted to have this opportunity to partner together to deliver critical infrastructure for our customers."
Iberdrola emphasised its focus on supporting Spain's growing digital economy through the alliance, as well as the importance of providing data centres with reliable renewable electricity.
David Mesonero Molina, Corporate Development Director of Iberdrola, said,
"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. 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 safe, clean and competitive energy 24 hours a day, 365 days a year."
The Madrid South project represents the first in a series of developments planned under the joint venture between Echelon and Iberdrola, with both parties intending to advance additional hyperscale data centre campuses in other regions of Spain in the future.