BGO and Bulk Infra team up for $1 billion renewables- powered data centre

June 5, 2024 11:00 AM EDT

By Simon Jessop and Supantha Mukherjee

LONDON (Reuters) - Real estate investor BGO has more than doubled its equity stake in Bulk Infrastructure to help fund a 1 billion euro ($1.09 billion) expansion of the Norwegian firm's renewables-powered data centre operations, executives from both firms told Reuters.

A surge in demand for computing power to drive artificial intelligence is driving investment by users including Microsoft, Meta and Amazon.

BGO, which manages more than $80 billion in assets, invested a further 350 million euros into Bulk Infra, taking its total investment to more than 640 million euros since 2020, BGO Co-Chief Executive John Carrafiell said.

The site in southern Norway, powered by wind, solar and hydro, could become the biggest 100% renewable energy-powered site in Europe if it reaches a 2 gigawatt goal after initially aiming for 400 megawatts by 2026.

"Given the commitments the tenants have made to be zero-carbon or other even more extreme requirements, they have to be in sustainable, renewable data centres because this makes up an enormous portion of their carbon footprint," Carrafiell said.

With Europe pushing technology companies to store user data locally and operators keen to reduce climate-damaging carbon emissions, Nordic governments view the sector as a growth opportunity.

However, there has already been a tussle in Norway when part-government owned munitions maker Nammo was unable to expand its factory as a TikTok data centre was using up the available power.

Carrafiell said demand was strong, with access to power "the defining limiter" for data centres and with all the buildings being built from scratch to allow AI-driven businesses to scale, for example by liquid cooling the servers.

Being located beside the largest renewable power sub-station in Europe could save up to 15% in energy lost as it moves through the cables; while the power-usage efficiency of the data centre would be at least 10% better, he added.

AI-driven data centres use up to 40 times more power density than traditional centres and it is critical for tech clients to have enough space to grow.

"Customers may want to deploy 20 megawatts today...The closer you can grow to that first facility, the better and more attractive you are," said Bulk Infra founder and Executive Chairman Peder Naerboe.

($1 = 0.9189 euros)

(Editing by Kirsten Donovan)

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