Datagrid New Zealand today announced the signing of a Pre-Purchase Agreement (PPA) with grid owner Transpower New Zealand for the supply of equipment for a 360MVA substation to be built on Datagrid’s Southland site. The equipment which includes four high-voltage power transformers will be supplied by Elsewedy Electric, a manufacturer of high-voltage power transformers.
The new substation will connect to the existing 220kV transmission lines that currently link the Manapōuri Power Station to Tiwai Point, and is targeted to be commissioned in late 2027.
It will position Southland as a strategic hub for AI infrastructure powered by renewable energy, according to Datagrid’s press release.
Datagrid is building the country’s largest hyperscale computing project — a 280MW AI Factory campus. Alongside the campus, Datagrid is also delivering the Tasman Ring Network — a new submarine optical cable that will bring high-capacity international connectivity to New Zealand’s South Island for the first time.
According to its website, the AI data center will be built on a 49-hectare site in Makarewa, Southland, which is located near the country’s largest hydroelectric station. It will use modular powered-shell units equipped with all critical systems. The site will also host a cable landing station for the Tasman Ring subsea system.
In March, w.media reported that once operational, the facility is expected to consume 280 MW of power, making it the second-largest electricity user in New Zealand after the Tiwai Point aluminium smelter. Datagrid said the development will generate more than 1,200 construction jobs during the build phase.
According to reports, the New Zealand government wants to attract NZ$25-30 billion in foreign investment to build datacentres and AI infrastructure in the country. It has natural advantages such as access to renewable energy, available land and cool climate, complemented by excellent digital connectivity, a skilled workforce, internationally competitive pricing, and a strong rule of law.
Rémi Galasso, Founder and CEO of Datagrid New Zealand, said: “Securing the grid connection equipment for our new GXP is a major milestone for Datagrid. We appreciate the professionalism of the Transpower team in working through the connection process with us. It is great to work together as Team New Zealand, willing to position New Zealand as an international digital player in this highly competitive AI infrastructure game.”
James Kilty, Chief Executive of Transpower New Zealand, said: “Transpower is carefully managing projects that require significant electricity such as Datagrid’s to ensure that as they connect, there is sufficient capacity on the grid to deliver the electricity and sufficient generation available to supply it. While detailed design for the substation is ongoing, procuring these transformers which are long-lead items helps Datagrid meet its planned timeline, which is targeting substation commissioning in late 2027.”
Abdulrahman Elsewedy, Group Chief Operations and Strategy Officer of Elsewedy Electric, said: “We are proud to support Datagrid in a project that showcases New Zealand’s potential to become a world leader in sustainable data computing.”