Iberdrola and Echelon Form Strategic Joint Venture to Develop Hyperscale Data Centres Across Spain
In a landmark collaboration set to reshape the digital infrastructure landscape in southern Europe, Iberdrola, one of the world’s largest energy utilities, and Echelon Data Centres, a leading operator of hyperscale data infrastructure in Europe, have officially announced the formation of a strategic joint venture aimed at building and operating advanced data centres across Spain. This agreement is the largest binding partnership of its kind in Europe between an energy provider and a dedicated hyperscale data infrastructure developer.
The joint venture represents a significant step forward for both companies as they capitalize on the growing synergy between data centre expansion and clean, reliable energy supply. It positions them at the forefront of one of the fastest-growing digital infrastructure markets in Europe.
Joint Venture Structure and Strategic Roles
Under the terms of the agreement, Iberdrola will acquire a 20% equity stake in the joint venture via its subsidiary CPD4Green, which specializes in enabling the development of data infrastructure projects through energy integration. Iberdrola’s role will include the identification and acquisition of land parcels that have access to robust electricity grid infrastructure—a critical element for establishing large-scale data centres.
Furthermore, Iberdrola will serve as the exclusive energy provider for the venture’s data centre projects, ensuring a 24/7 supply of clean, competitively priced electricity. This aligns with Iberdrola’s broader strategy of positioning itself as a key energy partner in the digital transformation era, where reliable electricity is fundamental to data-driven business operations.
Echelon Data Centres, owned by Starwood Capital Group and headquartered in Dublin, will retain the majority 80% ownership in the joint venture. Echelon will lead the design, development, commercialisation, and day-to-day operations of the data centres, leveraging its expertise in constructing scalable, efficient hyperscale facilities tailored to the needs of major cloud and digital service providers.
First Flagship Project: Madrid Sur Hyperscale Campus
The joint venture’s inaugural project is already underway: the Madrid Sur campus, a large-scale data centre complex located in a strategic technology corridor south of Madrid. The site, spanning 160,000 square metres, is projected to deliver 144 megawatts (MW) of processing capacity, supported by a secured 230 MW grid connection. Once operational, it will be one of the most powerful data centre facilities in Spain.
The construction phase of the Madrid Sur facility is expected to generate approximately 1,500 direct and indirect jobs, bolstering the local economy. The centre is targeted to become operational before 2030, with an anticipated electricity demand of 1 terawatt-hour (TWh)—an amount equivalent to the yearly consumption of more than 300,000 Spanish households.
To meet this energy requirement sustainably, Iberdrola will install an on-site solar photovoltaic plant, supplemented by additional renewable energy resources from its national clean energy portfolio. The entire electricity supply will be guaranteed to be green, secure, and competitively priced, allowing the Madrid Sur campus to align with the carbon neutrality goals of its future tenants.
Strategic Significance of the Partnership
According to David Mesonero Molina, Iberdrola’s Director of Corporate Development, this collaboration represents a new milestone in the company’s push to integrate renewable energy into the digital economy.
“This agreement strengthens Iberdrola’s strategy to facilitate the development of data centres, which have already become a key driver for electricity demand growth. The alliance signed with Echelon will allow us to leverage our portfolio of sites with grid connection and our capacity to provide these infrastructures with secure, clean and competitive energy 24 hours a day, 365 days a year,” Mesonero Molina stated.
The demand for energy-efficient data centres has accelerated rapidly as companies and governments increase investments in cloud computing, artificial intelligence, data storage, and digital infrastructure. Ensuring that these data facilities run on clean energy is critical to reducing their environmental impact, a challenge this partnership is uniquely poised to address.
David Smith, Chief Investment Officer at Echelon Data Centres, highlighted the strategic value of entering the Spanish market:
“Entering the Spanish data centre market has been a strategic goal for Echelon for several years. Spain offers significant advantages to our clients: access to large-scale renewable energy with some of the lowest prices in Europe and excellent construction and operational capabilities. Our partner, Iberdrola, is a global energy leader and we are delighted to have this opportunity to work together to deliver world-class data processing infrastructure for our clients.”
Growth Prospects and National Digital Ambitions
The collaboration between Iberdrola and Echelon also taps into Spain’s growing prominence as a critical node in the global digital infrastructure network. Over 70% of global data traffic into Europe now passes through Spain, facilitated by the country’s extensive fibre-optic networks, high-capacity submarine cable connections, and stable energy grid infrastructure. This makes Spain not just a geographic gateway, but a rising hub for digital services in the EU.
The new joint venture will benefit from Iberdrola’s existing infrastructure. The energy group already supplies more than 11 TWh of electricity annually to major technology companies and infrastructure operators globally, reinforcing its leadership in powering digital infrastructure. CPD4Green alone manages a site portfolio with 700 MW of development-ready capacity in Spain, and an additional 5,000 MW of potential future capacity.
These assets will be instrumental in enabling rapid scaling of the joint venture’s footprint. Future sites may include additional campuses in regions such as Catalonia, Valencia, and northern Spain, positioning the joint venture to serve a broader spectrum of European and global clients.
