New Zealand renewable energy generator Mercury has acquired a 12.7% minority stake in Datagrid NZ, deepening its involvement in the developer’s planned hyperscale AI data centre campus in Southland and strengthening the link between new renewable generation and emerging AI infrastructure demand.
Mercury has invested USD 30 million (NZD 53 million) in Datagrid NZ, whose proposed campus at North Makarewa is expected to become one of New Zealand’s largest data centre developments. The 360MW project has secured resource consent, with a final investment decision expected later this year. The investment is funded from existing capital facilities, Mercury said.
The investment builds on the companies’ existing relationship. In March, Mercury and Datagrid signed a 15-year, 140MW power purchase option agreement, providing a pathway for renewable electricity supply to the project. The agreement covers approximately 1.2TWh of electricity annually and was positioned as one of New Zealand’s largest commercial power arrangements dedicated to AI infrastructure.
Mercury chief executive Stew Hamilton, who will also join Datagrid NZ’s board, described the investment as a disciplined step aligned with the company’s long-term strategy. “Investing in Datagrid NZ is aligned with our core strategy, bolsters our position alongside an important emerging source of long-term electricity demand, and is structured to preserve balance sheet strength and flexibility for our wider capital programme,” Hamilton said.
“We have a deep renewable development pipeline, and long-duration demand from large electricity users like Datagrid NZ provides us with the revenue certainty that underpins our investments in new renewable generation developments.”
That pipeline includes the recently completed expansion of Mercury’s Ngā Tamariki geothermal station, along with the Kaiwera Downs and Kaiwaikawe wind projects due online later this year. Mercury executive general manager wholesale Tim Thompson said the investment would also give the company greater visibility into the evolution of AI-related electricity demand.
“It strengthens our position for future long-term offtake, and provides us with a closer link between future customer demand and renewable generation investment. It is a staged investment with appropriate governance and downside protection,” he said.
For Datagrid NZ, the transaction provides additional funding as it advances the project towards construction. “Time to market is driving our strategy, and closing this round of investment funding allows us to move decisively,” said Datagrid NZ founder and chair Rémi Galasso.
“Partnering with a leading New Zealand green electricity generator like Mercury is a strategic step for us, not just an electricity supply arrangement,” he said. “Thanks to this new partnership, Datagrid can continue developing its vision for the Southland project and begin horizontal construction works on the site.”
The proposed Southland campus is being developed as New Zealand’s first dedicated AI factory for advanced AI, sovereign cloud and high-density computing workloads. Mercury, which is required to maintain a minimum 51% Crown shareholding, is a 100% renewable generator across hydro, geothermal and wind.
If the project reaches final investment decision later this year, it would become one of the largest AI-focused data centre developments in New Zealand.