Start Campus to start construction of second data centre building in Sines by end-June

Start Campus will begin construction of the second data centre building in Sines by the end of the second quarter, an official company source told ECO. The second phase of the more than 8-billion-euro project with 1.2 gigawatts (GW) of capacity, which has been under licence since last year, will start by June.

The Sines DC project includes four additional buildings that will be completed in phases over the next five years. ‘The SIN02-06 buildings represent the second phase of this project, which stands out as one of the most ready-to-build projects currently under development, not only in Europe, but also worldwide,’ said the company led by Robert Dunn, in a response sent to ECO.

The project’s first building (SIN01) has been in operation since October and, during the construction phase, created approximately 700 jobs through its supply chain. Start Campus currently employs around 70 people directly. ‘Start Campus continues to drive the emergence of a new AI [Artificial Intelligence] hub in Europe, presenting Portugal as an ideal alternative to other markets with greater limitations, offering abundant renewable energy, grid access and exceptional connectivity to all continents,’ guarantees the company that is developing the data centre in Sines.

The joint company owned by Davidson Kempner and Pioneer Point Partners has the largest investment in data centres in Portugal, worth a total of 8.5 billion euros. The Sines DC project – characterised by the former government as the ‘biggest foreign investment since Autoeuropa’ – is located next to EDP’s thermoelectric plant, which was decommissioned in 2021, and will be powered by 100% renewable energy, but is not expected to be completed until 2028.

Named ‘Sines 4.0’, this mega data centre was announced in April 2021 and initially the planned grid connection capacity was just 495 megawatts (MW). In the meantime, the energy capacity has doubled, but it has also dragged out the timetable for the construction process, given that the first phase of the project has been delayed by three years compared to the original date. The name was another change: it is now called ‘Sines DC’.

‘Economic rationality’ leads to creation of new company

Earlier this year, Start Campus made a corporate change so that Sines Transatlantic Renewable & Technology Campus S.A. would spin off part of its assets – including the assets of this business in the Alentejo Litoral – to set up another company, Sines Campus DCO1 S.A., according to an entry in the Commercial Registry Office to which ECO had access. The demerger operation was justified by the management with ‘reasons of economic rationality’.

‘The commercial risks inherent in one asset can have a negative impact on another asset, even if they are not related from an economic and operational perspective. Furthermore, in an increasingly competitive sector, each of the assets requires tailor-made strategies for the development of each of its operations, brands and business model,’ reads the document.

This was yet another administrative procedure for the new era of Start Campus, after the controversy with Operation Influencer. Leading the company is manager Robert Dunn, who was appointed CEO following the departure of former directors Afonso Salema and Rui Oliveira Neves, both of whom were made defendants in the Public Prosecutor’s operation that led to the resignation of Prime Minister António Costa. Start Campus found itself involved in the investigation for allegedly working with the Socialist government to speed up the licensing of the data centre in the Sines industrial and logistics zone.

In July, the company responsible for the Sines data centre managed to recover the 600,000 euro bond it had been forced to pay as part of the coercive measures ordered in November 2023, as the weekly Expresso wrote. The amount was returned after the company requested a review of the measure, following a ruling by the Lisbon Court of Appeal that there was no evidence of a criminal offence in the investigation, as ECO reported at the time.

‘Fever’ hits national data centres

The data centre industry has been growing significantly in Portugal. The most recent estimate from the Portuguese Data Centre Association – PortugalDC points to more than 12 billion euros of investment being channelled into the country over the next five years.

‘Portugal is in a privileged position to capitalise on the growth of the data centre industry. By tackling the challenges of sustainability, talent and regulation, it can secure its place as a leading hub for digital and green technology in Europe,’ consider Carlos Paulino and Rita Lourenço, vice-presidents of PortugalDC.

In their opinion, all the indicators line up ‘perfectly’, given that Portugal is located on the south-western edge of Europe, has become a strategic point of connection between Europe, Africa and the Americas and has a developed network infrastructure.

‘This geographical advantage, combined with the country’s robust renewable energy capacity, has helped establish Portugal as a prime location for data centres in southern Europe,’ argue Carlos Paulino and Rita Lourenço, managing director of Equinix Portugal and Iberian sales manager at Legrand Data Centre Solutions, respectively.

Next Wednesday will mark International Data Centre Day, created to raise awareness and inspire future talent to enter the industry. The date was officially celebrated on 20 March, but this week the ‘party’ will take place at the Capitólio Theatre (Lisbon), with an event organised by the association that represents the sector to share knowledge and debate between companies.