Investing.com -- Drax Group shares jumped more than 8% Tuesday following the announcement of a partnership with Brookfield and AI infrastructure platform Radiant to develop a data centre at its northern England power station, in a project that could attract more than £20 billion ($26.8 billion) in investment.
The partnership will develop data centre capacity exceeding 1 gigawatt at Drax Power Station in North Yorkshire. Drax will provide land, power and access to the grid through its 4-gigawatt connection, while Radiant will contribute AI infrastructure expertise and Brookfield will supply capital through a joint venture with Qatar's Qai.
The development is planned in three phases, with the first phase targeting up to 100MW of capacity and commercial operations beginning in early 2028. Brookfield estimates initial investment of £2.5 billion for this phase, with total investment potentially exceeding £20 billion if constructed in full.
"If constructed in full, this project could become one of the largest data centres in the U.K.," Drax Group CEO Will Gardiner said.
The first phase is subject to planning, regulatory and network approvals, as well as final investment decisions by the partners. The companies said the project aligns with the UK Government's new Data Centre Covenant and its criteria supporting energy security and reindustrialization.
JPMorgan analysts said the announcement could lift the value investors place on Drax's data-center plans and raise hopes that the Drax Power Station keeps running after its subsidy scheme expires in March 2031. They also called Brookfield's involvement a positive for investors because of its credibility as a partner.
Separately, Citi analysts said that while "the headlines sound impressive at first sight, very little financials have been provided currently with none of the projects reaching FID at this stage."
"Drax is expected to be submitting planning application shortly on the first 100MW. In our view, the announcement of credible partner and intended development of project maybe supportive on the open, but could fade during the day as the deal reads more like a MOU rather than a firm contract given the lack of financials," they added.
Original Article
Drax surges on $27 bln AI data centre partnership with Brookfield, Radiant
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