New Iberdrola joint venture to invest over €2bn into Spanish data centres
Yusuf Latief
Posted on: 26 November 2025
Iberdrola will be responsible for identifying and securing land with good grid connectivity and ensuring a round-the-clock supply of renewable power.
Iberdrola has created a new joint venture, Echelon Iberdrola Digital Infra, alongside Echelon Data Centres, which will invest more than €2 billion ($2.3 billion) in large-scale data centre developments across Spain.
The new European joint venture, which Iberdrola in a release says is the largest between an energy company and a data centre developer, has more than 700MW secured and a potential portfolio of 5,000MW.
The joint venture, and completion of the transaction to set it up, were initially announced earlier this year in July.
Now, after obtaining the necessary regulatory approvals, Echelon Iberdrola Digital Infra will begin its commercial activity with a focus on hyperscale technology companies and providers of infrastructure and services for AI.
This agreement reinforces Iberdrola's strategy of facilitating the development of data centres, which have become a key driver of growth in electricity demand.
The first project of this alliance will be Madrid Sur, a 160,000m² complex that will have 144MW for data processing and already has a 230MW electricity connection secured.
This project will generate about 1,500 direct and indirect jobs and its estimated demand is 1TWh. In addition, it will have a photovoltaic solar plant and additional renewable energy from Iberdrola to guarantee all its electricity consumption.
At the time of the joint venture’s launch, said David Mesonero Molina, Director of Corporate Development at Iberdrola:
“This agreement reinforces Iberdrola's strategy of facilitating the development of data centres, which have become a key driver of growth in electricity demand.
“The joint venture signed with Echelon will allow us to leverage our portfolio of sites with access to electricity connections and our ability to offer these infrastructures secure, clean and competitive energy 24 hours a day, 365 days a year.”
David Smith, Director of Investments at Echelon Data Centres, said entering the data centre market in Spain "has been a strategic objective for Echelon for several years".
“Spain offers significant benefits for our customers: access to large-scale renewable energy at some of the lowest prices in Europe and large construction and operating capacities. Our partner, Iberdrola, is a global energy leader and we are delighted to have this opportunity to partner with them to offer our customers the best data processing infrastructure.”
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For the joint venture, Iberdrola will contribute its experience in renewable generation and in the development and management of large electricity infrastructures.
It will be responsible for identifying and securing land with good connectivity to the electricity grid and ensuring a 24/7 clean energy supply. For its part, Echelon will assume the permitting, design, marketing and operation processes.
The stake in the joint venture will be up to 80% for Echelon. Founded in 2017 and headquartered in Dublin, Echelon Data Centres is a privately held company that develops, owns and operates hyperscale data centre campuses in Europe. The company has a portfolio of more than 2GW in Tier 1 markets such as Dublin, London and Milan.
According to the company, all of its campuses are designed to operate exclusively on renewable energy. In 2024, Starwood Capital Group acquired 50% of the company through an investment of €850 million ($983.7 million), valuing the platform at around €2.5 billion ($2.9 billion) and providing significant capital for its expansion.
The remaining 20% goes to Iberdrola through its subsidiary CPD4Green, the company’s digital infrastructure arm set up to accelerate the deployment of data centres with potential partners, starting in Spain.
Iberdrola has already secured more than 700MW in electricity connections for the joint venture in strategic areas near Madrid and is planning new projects that could add up to €6 billion ($6.9 billion) of investment.
Iberdrola currently markets more than 11TWh to technology companies and data centre operators worldwide.
Currently, more than 70% of data traffic to Europe passes through Spain, which Iberdrola says consolidates the country as a strategic digital hub in Europe thanks to its fibre optic network and submarine connections.
Added to this are the high availability of renewable energy at competitive costs and an advanced electrical infrastructure.
