Echelon Data Centres is expanding into Spain in partnership with renewable energy company Iberdrola.

The Starwood-owned firm this week announced the signing of a joint venture (JV) agreement with Iberdrola to build and operate data centers in Spain. Echelon will own 80 percent of the JV, with Iberdrola owning the remaining 20 percent through its dedicated digital infrastructure subsidiary CPD4Green.

The agreement will see Echelon expand its international data center portfolio with 100 percent of its Spanish power infrastructure and energy supply needs provided by Iberdrola.

Echelon will be responsible for planning, design, commercialisation, and the day-to-day management of the Joint Venture, while Iberdrola will source and secure suitable land plots with suitable grid connectivity for data center development.

The first project under the JV is to be located around Madrid; Madrid South will be a 160,000 sqm (1.72 million sq ft), 230MW campus, expected to be ready for service by 2030. Further details weren’t shared, but the site will also include on-site solar.

David Smith, chief investment officer at Echelon Data Centres, said: “Entering the Spanish data centre market has been a strategic goal for Echelon for several years. Spain has material benefits as a market for our customers; a supportive regulatory and policy environment, high-quality talent from both a construction and operational perspective, and access to some of Europe’s lowest price renewable energy [at] scale.

“Our partner, Iberdrola, is a world leader in building and operating generation assets and we are delighted to have this opportunity to partner together to deliver critical infrastructure for our customers.”

Iberdrola is one of the largest suppliers of renewable energy globally. It has signed Power Purchase Agreements (PPAs) with the likes of Amazon, Meta, Vodafone, and O2 Telefónica.

Reports that Iberdrola was looking to enter the data center market appeared last year. News that the company was set to sign a data center JV in Spain surfaced in October 2024.

David Mesonero Molina, corporate development director at Iberdrola, added: “This agreement reinforces Iberdrola’s strategy of facilitating the development of data centres, which have already become a key vector for the growth in electricity demand. The alliance signed with Echelon will allow us to value our portfolio of sites with access to electricity connection and our ability to offer these infrastructures safe, clean, and competitive energy 24 hours a day, 365 days a year.”

Founded in 2016, Echelon has more than 600MW of capacity either operational or in planning in Ireland and the UK, while CPD4Green has secured more than 700MW of power connections, including locations close to Madrid and in Aragon.

Echelon’s sites in Ireland – DUB10 and DUB40 in Dublin’s Clondalkin and Grange Castle, as well as DUB20 and another County Wicklow site, DUB30 – that will have a combined capacity of around 400MW. In the UK, it is developing the LCY10 site in London’s Docklands. A second London campus (LCY10) is planned in Chesham, Buckinghamshire.

Echelon’s major shareholder is Starwood Capital Group, a global private investment firm with approximately $115 billion in assets under management across North America, Europe, and Asia. Starwood is developing a number of data centers in the US and last year launched a dedicated data center unit, and significant portions of its newest fund will reportedly go to data centers.

Echelon reportedly recently sued several companies in the US, accusing power provider MPD Electric Cooperative and commercial real-estate developer Marlboro Development Team of hijacking multi-billion-dollar plans to build data centers in South Carolina.