Azrieli Group Data Centers in Norway Unlikely to Be Significantly Impacted by Power Freeze

Azrieli Group announced Tuesday to the stock exchange that preliminary assessments from its Norwegian advisors indicate that a power allocation freeze by local grid operator Statnett will not substantially affect the group's data centers. The freeze, which is expected to last until August 1, 2027, also suspends the processing of new direct grid connection requests. This distinction is crucial for Azrieli, which operates in Norway through its subsidiary Green Mountain. The company had previously reported a financing agreement of approximately 1.4 billion euros for an 80-megawatt data center project for an international technology firm, projected to yield about 117 million euros in net operating income annually upon full operation. Azrieli has not revised this forecast.

Statnett's decision stems from a significant bottleneck in power supply. Currently, data centers in Norway connected to the grid represent about 800 megawatts. An additional 4,200 megawatts have been reserved for new facilities, with a further 9,100 megawatts awaiting allocation, more than eleven times the capacity already in use. The Norwegian government is also considering new licensing rules that would prioritize facilities serving healthcare, security, and essential infrastructure.

The power allocation freeze could have dual implications for Azrieli. While it may enhance the competitive advantage of existing facilities or those already allocated power, projects still requiring electricity may face delays or be subject to new priority assessments.