Portugal expects to attract more than 12 billion euros of investment in data centres over the next five years
Association that represents data centres in Portugal forecasts more than 12 billion in investment in the country in the next five years. But the political crisis could have a negative impact.
Portugal “expects to receive investment of more than 12 billion euros” in data centres over the next five years, estimates the association that represents the sector in the country, with 80% of the amount to be channelled into centres adapted to the new demands of artificial intelligence (AI).
The figure was provided to ECO by the president of PortugalDC, Luís Pedro Duarte, indicating that “it’s data from the association itself”.
But the return of political instability is a deterrent for investors, he recognises, when asked about the vote of confidence in the government this week, which will lead to early elections in May.
“For foreign investors, this kind of situation is always unpleasant because, in essence, those who are investing want to be far away from turmoil and insecurity”, points out Luís Pedro Duarte.
The political crisis in Portugal, following the fall of Luís Montenegro’s government, could thus “have a detrimental effect on foreign investment” in data centres, says the president of PortugalDC, exemplifying this with the fact that the agreement signed just five months ago between the government and the social partners to lower the corporate income tax and increase the minimum wage to 1,020 euros by 2028 has now been put on hold, as ECO reported last week.
In June last year, the then president of AICEP, Filipe Santos Costa, toldthe newspaper Expresso that Portugal “could add up to more than ten billion euros in current and new data centre investment projects by 2030”.
AI boom heats up investment
The training and inference of large AI models requires high computing capacities, as well as the adoption of new cooling technologies, such as liquid cooling, in which “pipes of cold liquid enter the backstage where the servers are housed”, says the expert.
This “paradigm shift” is “directly proportional to the size of the investment required”, adds Luís Pedro Duarte. Furthermore, AI is increasing energy needs, putting pressure on other markets and allowing Portugal to gain even more recognition.
“We have green energy production. It’s no longer just a pretty thing, it’s actually a differentiating factor. We have competitive electricity costs. Portugal is still one of the countries in Europe with the lowest electricity costs”, points out the association’s leader.
But energy is not the only differentiating factor: “We have an excellent geographical position, which allows us to have an absolutely differentiating position in Europe when it comes to connectivity with submarine cables. We have a terrestrial telecommunications network with high capillarity. We have an extraordinary quality of life. We have no geographical risks – the earthquakes we do have are perfectly accommodating. And we have a highly qualified labour force”, says Luís Pedro Duarte.
PortugalDC was founded in 2023 and currently has more than 80 members, 13 of whom are data centre operators. The rest include product and service vendors, maintenance contract providers and two law firms, according to the president.
The country has been attracting bets from other companies, such as Equinix’s new data centre in Lisbon, which is nearing completion, and a third that the same company has already announced it will develop, probably in 2027. Other investments underway in Portugal are Atlas Edge’s data centre in Carnaxide, Merlin Properties’ in Castanheira do Ribatejo and Voltekko’s in Alcochete.
These are in addition to the Start Campus project to build a large data centre campus in Sines, next to the old EDP power station. The development is called Sines DC (formerly Sines 4.0), in an investment that was planned to be up to 3.5 billion euros, but which was revised upwards last year to 8.5 billion.
