Iberdrola and Echelon Data Centers have announced a strategic joint venture to build and operate data centers in Spain, marking the largest binding agreement of its kind in Europe between an energy company and a data center operator. The partnership was announced on July 28, 2025.

Joint Venture Structure and Responsibilities

Under the agreement, Iberdrola will hold a 20% stake in the joint venture through its subsidiary CPD4Green, while Echelon will hold the remaining 80%. Iberdrola will be responsible for identifying and securing land with grid connectivity where the centres will be developed, and will provide 24/7 electricity to the sites.

Echelon, a leading hyperscale data centre infrastructure operator in Europe headquartered in Ireland and owned by Starwood Capital Group, will oversee development, design, commercialisation and day-to-day management of the company. The Dublin-based technology company will manage permits, design, marketing and day-to-day operations of the joint venture.

Madrid Sur Project Details

The first project of the joint venture will be Madrid Sur, a 160,000 square metre complex offering 144 megawatts of data processing capacity with a secured 230 MW grid connection. The centre is expected to create around 1,500 jobs and become operational before 2030.

The facility will require 1 terawatt-hour of electricity, which will be met by an on-site solar photovoltaic plant, supplemented by additional clean energy capacity from Iberdrola. This represents the initial project under the partnership agreement.

Strategic Market Position

Iberdrola already supplies more than 11 TWh of electricity to technology companies and infrastructure operators worldwide, making it a leading provider of electricity to data centres. The company's subsidiary CPD4Green, focused on enabling the development of data processing infrastructure, already has a site portfolio with 700 MW capacity in Spain and potential for an additional 5,000 MW.

Spain has established itself as the gateway for global data traffic into Europe in recent years. Over 70% of data traffic heading into the continent passes through Spain, thanks to its fibre-optic network, submarine cable connections, access to clean and competitive energy and robust electricity grid.

Executive Commentary

David Mesonero Molina, Iberdrola's Director of Corporate Development, stated that the agreement strengthens Iberdrola's strategy to facilitate the development of data centres, which have already become a key driver for electricity demand growth. He noted that the alliance signed with Echelon will allow the company to leverage its portfolio of sites with grid connection and its capacity to provide these infrastructures with secure, clean and competitive energy 24 hours a day, 365 days a year.

David Smith, Chief Investment Officer at Echelon Data Centres, commented that entering the Spanish data centre market has been a strategic goal for Echelon for several years. He highlighted that Spain offers significant advantages to their clients, including access to large-scale renewable energy with some of the lowest prices in Europe and excellent construction and operational capabilities. Smith described Iberdrola as a global energy leader and expressed delight at the opportunity to work together to deliver world-class data processing infrastructure for their clients.

The partnership represents Iberdrola's continued strategy of providing secure, clean and competitive energy access to tech companies and promoting electrification. Through this agreement, the company strengthens its position in facilitating data centre development as these facilities become increasingly important drivers of electricity demand growth.

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