Azrieli Group Secures 1.4 Billion Euros in Funding for Norwegian Data Center Project
Translated & summarized from Calcalist by baba
Azrieli Group's subsidiary, Green Mountain, has secured 1.4 billion euros in financing for an 80-megawatt data center project in Norway. The project, which has experienced a 16-week delay due to client specification changes, is now expected to begin operations later than initially planned. The facility is leased to an international technology company for 15 years, with an option to extend. Azrieli anticipates significant annual net operating income from the project, contributing to the growth of its data center sector.
The story in 5 lines · by baba
- Azrieli Group's Green Mountain subsidiary secured 1.4 billion euros in financing for a Norwegian data center.
- The 80-megawatt data center project is leased to an international technology company for 15 years.
- The project faces a 16-week delay due to client-requested technical specification changes.
- Azrieli estimates the facility will generate 117 million euros in annual net operating income.
- This project is Azrieli's second-largest data center, after a TikTok campus in Norway.
Despite a multi-month delay, Azrieli Group's new data center project in Norway is moving forward. Green Mountain, a subsidiary of Azrieli, has secured approximately 1.4 billion euros in financing for the facility. This funding includes a credit line of about 1 billion euros for construction and additional smaller credit lines for operational expenses, VAT payments, and reimbursements from the client.
The project's client, an international technology company, signed a 15-year agreement with an option for a further 15 years to lease the 80-megawatt data center. Azrieli estimates the facility will generate an average annual net operating income (NOI) of 117 million euros once fully operational.
The financing agreement features a credit period of up to seven years with a variable interest rate based on EURIBOR plus a 2%-3% margin, resulting in an annual interest rate of 4.4%-6.2% based on current rates.
Originally, Azrieli anticipated the first phase, providing 20 megawatts, to be completed by late March 2027. However, the company recently reported a 16-week delay due to the client's request for technical specification changes. The second phase, also 20 megawatts, will be delayed by 12 weeks.
Green Mountain manages Azrieli's data center operations. This new Norwegian facility is the group's second-largest data center project, following a March 2023 agreement for a 90-megawatt campus in Norway for TikTok. That campus, which began partial operations in Q3 2024 and has since reached full capacity, significantly boosted Azrieli's data center sector performance. While growth in the sector has slowed in recent quarters after the TikTok campus reached full capacity, new agreements are expected to accelerate growth again.
Other recent agreements include operating a 54-megawatt facility in Germany, providing services from a 13.6-megawatt facility in England, and a 5-megawatt service agreement in Norway. These signed agreements are projected to contribute approximately 1 billion shekels to the annual NOI of Azrieli's data center operations once fully implemented, though revenue will be recognized gradually as facilities come online starting late this year. The delay in the new Norwegian facility will consequently impact its revenue generation timeline.
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