Drax, Brookfield partner on $27 billion AI data centre in UK

Drax, Brookfield Collaborate on $27 Billion AI Data Centre in UK

Major Investment and Strategic Partnership Announced

Nov 3 (Reuters) - British power firm Drax has partnered with Brookfield and AI infrastructure platform Radiant to develop a data centre with more than 1 gigawatt of capacity at its northern England power station, in a project that could attract more than £20 billion ($26.8 billion) in investment.

Drax shares jumped 9% in early Tuesday trade.

Background and Industry Context

The project comes as Britain moves to fast-track strategically important data centres with priority grid connections and planning support to boost AI capacity and keep sensitive data onshore.

Potential Impact on UK Data Centre Market

"If constructed in full, this project could become one of the largest data centres in the UK," Drax Group CEO Will Gardiner said.

Market Reactions and Analyst Insights

JPMorgan analysts said the announcement could increase the market value attributed to Drax's data-centre ambitions and raise expectations that Drax Power Station could continue operating beyond the expiry of its subsidy scheme in March 2031.

They added that Brookfield's involvement should be viewed positively by investors given its credibility as a partner.

Project Details and Investment Breakdown

Compute at Home Initiative

COMPUTE AT HOME

Investment Phases and Financial Structure

Brookfield estimates total investment could exceed £20 billion, including an initial £2.5 billion for the first phase, Drax said.

Drax will provide land, power and access to the grid through its 4-gigawatt connection at Drax Power Station. Radiant will contribute AI infrastructure expertise, while Brookfield will supply capital through a joint venture with Qatar's Qai announced in 2025.

Operational Timeline and Approvals

The first phase, which will draw power directly from the grid, is targeted to begin commercial operations in early 2028, subject to planning, regulatory and network approvals and final investment decisions by the partners.

Community and Local Benefits

The partners said the project would also establish a voluntary community benefits fund developed with local communities, separate from planning obligations and Drax's existing programmes.

Additional Information

($1 = 0.7460 pounds)

(Reporting by Yadarisa Shabong in Bengaluru. Editing by Rashmi Aich and Mark Potter)