Rémi Galasso built the Hawaiki trans-Pacific cable before he built Datagrid. His next project is 42 hectares of Southland farmland at Makarewa, a quarter of an hour north of Invercargill, where on 11 March 2026 three councils granted consent for a 280MW data centre campus. At full build it would draw about 6% of New Zealand’s electricity. Rio Tinto’s Tiwai Point smelter, on 572MW, is the country’s largest single user.
Three things are outstanding. The first is money. Asked in late June how the fundraising was going, Galasso messaged the NZ Herald’s Tech Insider: “Still working on it.” The second is power. Mercury has signed a fifteen-year option over 140MW. It is not a supply contract, and chief executive Stewart Hamilton said the structure “reflects that the data centre is currently in the development stage and gives flexibility in advance of a final investment decision.” The third is the cable. Chorus signed on in December 2024 and withdrew at its full-year results in August 2025, chief executive Mark Aue saying “pre-sales commitment was not stacking up” and cable ships were booked out. “The timelines kept moving to the right. Realistically, I’d now say it’s post-2030.” Datagrid targets opening in 2028.
In the last week of June, Invest New Zealand gathered about 100 senior business leaders in Auckland and set a target of NZ$25bn to NZ$35bn in private investment across data centres, renewables, fibre and transmission over five years. Chief executive Robert Wall called it a call to arms. Contact Energy’s Mike Fuge called it a “once-in-three-generations opportunity,” alongside refrigerated meat shipping in the 1870s and the wool boom of the 1950s. The pitch rests on a Boston Consulting Group report from February 2026 arguing New Zealand could unlock up to $70bn of economic activity over a decade, from 600MW of new build. The country has 154MW of colocation capacity built. The target appears in no published Invest New Zealand document we could locate; the account of the meeting is Joel MacManus’s, in The Spinoff on 6 July 2026.
Who owns New Zealand’s data centres
Foreign capital controls most of the operators. Brookfield holds DCI, Pacific Equity Partners holds 75% of TenPeaks, and NEXTDC, Microsoft and AWS are Australian and American. Infratil-led CDC and Datacom are the significant domestic positions. Microsoft, AWS and Datacom disclose no megawatts, so nobody can weight this by capacity.
Operator | Owner | Sites | Capacity | Status |
CDC | Infratil (NZ) 49.75%, Future Fund 34.55%, Commonwealth Superannuation Corporation 12.04% | Three Auckland sites: Silverdale and two Hobsonville campuses | About 80MW operating per Infratil; the NZ Herald puts CDC near 220MW across the three | Operating; 90MW future build |
DCI Data Centers | Brookfield (Canada) | AKL01 Westgate, AKL02 Albany | AKL02 designed for 40MW; first stage 10MW, 5MW fitted | AKL01 operating; AKL02 first stage complete per DCI |
TenPeaks | Pacific Equity Partners (Australia) 75%, Spark 25% | 11 facilities, Takanini and North Shore | 23MW+ built, 130MW+ pipeline | Operating, expanding |
Datacom | Datacom (NZ) | Five facilities after buying T4’s Auckland site, the IBM-designed Tihi centre, on 31 March 2026 | Not disclosed | Operating |
NEXTDC | ASX: NXT (Australia) | AK1, 21 Hobson Street, Auckland | 10MW scaling to 15MW | Under construction |
Microsoft | Microsoft (US) | New Zealand North, Auckland | Not disclosed | Operating since December 2024 |
AWS | Amazon (US) | Asia Pacific (New Zealand), Auckland | Not disclosed | Operating since September 2025 |
Datagrid | Formerly Galasso family trust 62.5%, BW Digital 37.5%; a November 2025 OIO update records BW’s stake sold to a Galasso entity | Makarewa, Southland | 280MW at full build, 1GW ambition | Consented March 2026 |
Source: company disclosures, Infratil investor materials and primary reporting, July 2026. Hyperscaler megawatts are not disclosed.
The hyperscalers have stopped building and started leasing. AWS opened its Auckland region in September 2025 against a NZ$7.5bn commitment first announced in 2021 and spread across roughly fifteen years. Its New Zealand entity then wrote off NZ$44.9m on a Westgate development abandoned after initial earthworks. Microsoft, which spent around NZ$1bn at Westgate, let a time-limited Overseas Investment Office consent lapse on a second Auckland site at Whenuapai. Both now favour colocation, and the NZ Herald reports Google has done a colocation deal with an unnamed provider. Google announced an Auckland cloud region in 2022 and has published no launch date. Oracle has no New Zealand region.
How many data centres New Zealand has
Counts differ because the scopes differ. The New Zealand Existing and Upcoming Data Center Portfolio, published on 27 April 2026, counts 35 operational colocation facilities, the third-party sites operators lease to customers, holding roughly 154MW of IT load. Nine more are upcoming, and Auckland takes more than 60% of that capacity. Data Center Map, which also counts enterprise and on-premises rooms, lists 62 facilities across 48 operators.
BCG counts about 80MW of new capacity added over the past five years, which tripled the local market on its measure. Mordor Intelligence sizes the market at US$0.98bn in 2026, reaching US$1.57bn by 2031. Australia holds roughly 1,350MW of live capacity and is heading past 3,100MW by 2030.
Corporate exposure to the New Zealand build
The build concentrates into a short list of names.
Entity | Exposure | Terms | Date |
Infratil (NZX/ASX: IFT) | 49.75% of CDC | Alongside the Future Fund at 34.55% and Commonwealth Superannuation Corporation at 12.04% | Feb 2025 |
Spark New Zealand (NZX/ASX: SPK) | 25% of TenPeaks, two board seats | Sold 75% to Pacific Equity Partners; base enterprise value NZ$575m, up to NZ$705m with earn-out to Dec 2027 | Completed 30 Jan 2026 |
Mercury NZ (NZX: MCY) | AWS | Firm 15-year corporate power purchase agreement over roughly half of Turitea South’s output | Apr 2023 |
Mercury NZ (NZX: MCY) | Datagrid campus | 15-year, 140MW Power Purchase Option Agreement, about 1.2TWh a year | Mar 2026 |
Contact Energy (NZX/ASX: CEN) | Microsoft | 10-year Renewable Attribute Purchase Agreement over Te Huka 3’s 51.4MW | Announced May 2023 |
Chorus (NZX/ASX: CNU) | Tasman Ring subsea cable | Withdrew from the Datagrid partnership | Aug 2025 |
NEXTDC (ASX: NXT) | AK1 Auckland | About AU$140m committed | 2024 onward |
Brookfield | DCI Data Centers | Brookfield-controlled; exact economics not public | Since 2019 |
Source: NZX and ASX disclosures, company releases and Infratil investor materials, July 2026. Corporate disclosures, not investment advice.
Meridian Energy has no exposure to the Southland data centre build. The 2020 thesis that Manapōuri surplus would be freed by Tiwai Point’s closure lapsed when Rio Tinto agreed terms in May 2024 with Meridian, Contact and Mercury running to 2044. Meridian’s 100MW agreement in principle from 2020 was never signed, and by 2023 it had voiced concerns about the project, according to a June 2025 MBIE briefing.
Three headline power deals, three different instruments
The three headline energy agreements behind New Zealand’s biggest builds use different instruments, and the instrument decides which projects can be financed.
Deal | Instrument | What it actually is |
Mercury and AWS, Turitea South | Firm corporate power purchase agreement | Physical electricity, 15 years, roughly half a 103MW wind farm’s output |
Contact and Microsoft, Te Huka 3 | Renewable Attribute Purchase Agreement | Renewable certificates over 51.4MW of geothermal, without physical supply |
Mercury and Datagrid, Makarewa | Power Purchase Option Agreement | An option over 140MW, half the campus |
Source: company releases, July 2026.
Only one of the three is a firm power contract, and it covers output from a wind farm already built. As at March 2026 Meridian, Contact and Genesis had no commercial agreement with Datagrid. Mercury chief executive Stewart Hamilton described the position to the NZ Herald as “a component of chicken-and-the-egg.”
Datagrid’s Invercargill campus and its financing gap
The consent covers a 78,000 square metre campus of six data halls, each with its own cooling plant, backed by 84 emergency generators and more than 1.5 million litres of stored diesel. The process was non-notified, decided by independent commissioner Hugh Leersnyder. Datagrid’s consent application projects up to 5,400 construction jobs, 72 full-time roles once operating, and NZ$36m a year to GDP.
Reported build cost runs from NZ$3.4bn to US$3bn, which the NZ Herald renders as NZ$5.1bn, and none of it is announced as raised. Transpower’s grid development executive general manager Matt Webb told the NZ Herald that once technical requirements are agreed and Datagrid commits to a Works Agreement, the indicative timeline is two years. The connection needs a new 220kV substation, sized for 280MW rather than the 1GW ambition, and Datagrid carries the cost.
The cable is the harder problem, and a June 2025 MBIE briefing put it plainly: “The cable is essential for the data centre.” The Tasman Ring Network, announced with Chorus in December 2024, is a 6,000km, 540Tbps loop connecting Bluff to Sydney, Melbourne and Hobart, and Australia’s east coast back to Auckland. MBIE expected it operational in 2027. Datagrid has taken it in-house, which puts a 6,000km subsea system in the hands of the man who built Hawaiki.
Seismic risk appears nowhere in the consent record. Invercargill’s earthquake hazard is driven by distant sources rather than the Alpine Fault, and New Zealand data centres are built to the post-disaster standard used for hospitals.
How much power the build will draw
New Zealand generated 85.5% of its electricity from renewables in 2024, per MBIE, and the figure moves with rainfall because the backbone is hydro. In a dry year the country has historically closed the gap by paying its largest industrial user to reduce demand. Tiwai Point holds 185MW of contracted demand response. Transpower’s Winter 2025 review records storage coming within 560GWh of the point at which it judges a 1% risk of running dry. The Taranaki gas plant closed at the end of 2025.
A 280MW AI training campus offers nothing equivalent, because a GPU cluster mid-training run cannot be switched off the way a smelter can. It is the same firming argument Australia is having, which we set out in our analysis of what data centres and renewables mean for power bills.
Transpower’s new connection enquiries dashboard, updated 4 July 2026, records 30 data centre enquiries, sixteen of them in Auckland and four across Otago and Southland. RNZ reported sixteen in October 2023, on Transpower’s count at the time. Transpower publishes no megawatt figure for data centres, and its 2023 Transmission Planning Report states that its “load forecasts do not include any hyperscale data centres.” BCG estimates that a further 1.8 to 4.0TWh of demand by 2030 would open a 1.4 to 3.6TWh shortfall against the renewable generation pipeline.
MBIE puts New Zealand’s average industrial electricity cost at 18.78 cents per kWh for the year to March 2026, down from a 22.55 cent peak. No like-for-like large-industrial comparison with Australia exists in public data.
The settings favour offshore capital
The Overseas Investment (National Interest Test and Other Matters) Amendment Act came into force on 6 March 2026, replacing the benefit-to-New Zealand test with a single national interest test and a fifteen working day screening timeframe. Offshore money moves through the gate faster than it did.
The Investment Boost measure, effective for assets first available for use from 22 May 2025, allows an immediate 20% deduction of a new depreciable asset’s cost, uncapped, covering commercial buildings, fit-out and equipment. Neither measure is data centre specific. Both favour capital-intensive builds funded from offshore.
Water take and social licence at the Makarewa campus
Environment Southland’s water permit, issued 11 March 2026, allows an evaporative cooling take of seven litres a second, 604,800 litres a day and 220,752,000 litres a year. For scale, a 1,000-cow Southland farm sought 120,000 litres a day in 2022. At the June investor event, Invest New Zealand’s chief executive answered water concerns by pointing to closed-loop cooling as an industry direction. Makarewa’s consented design is not closed-loop.
The Ipsos AI Monitor 2025 found 66% of New Zealanders say AI makes them nervous, second among 31 countries behind Australia at 67%. A change.org petition opposing the Invercargill campus closed with 26,027 signatures, arguing the ratio: 280MW and 220 million litres of water a year for 72 permanent roles.
The institutional picture is friendlier. Southland Mayor Rob Scott and Invercargill Mayor Tom Campbell have both backed the project. Three months before construction, Datagrid will invite Kā Papatipu Rūnaka, the region’s Ngāi Tahu groups, to form a joint working group called Te Rewa to set customary practice for the build. The Southland District Council decision records that the project “aligns with iwi aspirations for sustainable land use and environmental restoration.”
New Zealand and Australia, side by side
New Zealand | Australia | |
Installed capacity | About 154MW of colocation IT load across 35 facilities | About 1,350MW live, on a broader basis |
Capacity outlook | 9 facilities upcoming | 3,100MW+ by 2030 |
Largest single campus | Datagrid, 280MW consented | Project Southgate, 1.6GW target by 2028 |
Neocloud pipeline | No operator identified in our tracking | 1,600MW+ committed across five operators |
Hyperscale cloud regions | AWS, Microsoft | AWS, Microsoft, Google, Oracle |
Grid operator | Transpower | AEMO |
Core constraint | Dry-year firming on a hydro grid | Grid connection and planning |
Source: MBIE, Transpower and primary company disclosures, July 2026.
The two markets are chasing different workloads. The cloud regions are in Auckland, near the users and the Tasman cables. The training campus is 1,180km south, where Datagrid cites low average temperatures and proximity to the Manapōuri, Mataura and Monowai hydro schemes. Inference and interactive cloud are latency-sensitive; AI training is not. Australian money is already inside New Zealand’s colocation base, through the Future Fund’s stake in CDC, Pacific Equity Partners’ control of TenPeaks and NEXTDC’s Auckland build.
What has to happen next
A 280MW campus holding a 140MW price option and no announced debt is a consent. Financial close would make it a project.
Catalyst | What it determines |
Datagrid financial close | No debt announced, and no other consented project at this scale |
Transpower Works Agreement | Two years indicative once signed; Datagrid funds a 220kV substation |
Tasman Ring in-service date | MBIE calls the cable essential and expected 2027; Chorus said past 2030 |
Conversion of the Mercury option | An option becomes firm supply, or it lapses |
Infratil FY27 disclosures | Whether CDC’s New Zealand megawatts are reported separately from Australia |
Invest New Zealand publishing its target | NZ$25bn to NZ$35bn has no published document behind it |
Source: primary reporting and company disclosures, July 2026