Data Centre Investment Pre-Feasibility Study

Navigator Consulting completed a Concept Note and Pre-Feasibility Study for a group of international investors evaluating entry into the North American hyperscale data centre and AI infrastructure market.

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The assignment assessed the feasibility of developing a phased data centre investment platform reaching approximately 200 MW of capacity, with an indicative investment requirement of approximately US$1.36 billion over a ten year development horizon.

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The Race to Hyperscale

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The rapid development of artificial intelligence is driving an unprecedented expansion in global computing requirements. Hyperscalers, AI companies, cloud providers and their infrastructure partners are investing heavily in new computing capacity, data centres, energy infrastructure and supporting systems.

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At the time of the study, industry estimates indicated annual hyperscaler AI infrastructure expenditure reaching approximately $ 600 to $ 700 billion by 2026, approximately $ 1.7 trillion in global data centre capital expenditure by 2030, and potentially several trillion dollars of total investment required to meet AI driven computing demand.

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This investment race is increasingly constrained by physical infrastructure. Large scale data centres require substantial and reliable electricity supplies, suitable land, high capacity grid connections, fibre connectivity, water and cooling infrastructure, appropriate zoning and a regulatory environment capable of supporting long term infrastructure development.

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For AI infrastructure in particular, access to power is becoming one of the defining investment constraints. Individual AI clusters can require 20 to more than 100 MW of capacity, while grid interconnection in constrained markets can require several years.

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Selecting the Midwestern United States

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Navigator assessed the Midwestern United States as a potential location for a long term data centre investment platform. 

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The region combines political and regulatory stability with substantial land availability, established energy infrastructure, renewable energy resources, access to major electricity transmission and fibre networks, competitive operating costs and a climate that can support efficient data centre cooling.

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The selected investment geography also benefits from an established hyperscale data centre ecosystem, demonstrating both the availability of suitable infrastructure and long term demand from major technology companies. The study identified access to scalable power infrastructure, competitive land and utility costs, investment incentives, national fibre connectivity and relatively low exposure to major natural disaster risks as important components of the investment proposition.

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What We Did

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Navigator developed the initial investment concept and Proof of Concept Feasibility Study required to determine whether the investors should proceed towards detailed project development.

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Our work included:

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• Analysis of global AI, hyperscale computing and data centre investment trends;

• Assessment of the principal drivers of future data centre demand;

• Evaluation of potential investment locations and location selection criteria;

• Analysis of electricity availability, grid connectivity and renewable energy resources;

• Assessment of land, fibre, cooling and supporting infrastructure requirements;

• Development of a phased 200 MW investment strategy;

• Capital expenditure planning and development of indicative investment requirements;

• Development of operating revenue and EBITDA assumptions;

• Financial modelling and indicative investment payback analysis;

• Development of the Phase 1 investment and use of funds;

• Assessment of potential joint venture and project financing structures;

• Identification and assessment of major investment, development, market and operating risks;

• Development of corresponding risk mitigation strategies.

 

The investment model envisaged an infrastructure intensive initial phase focused on securing land, approvals, grid access and core infrastructure, followed by successive development phases as power capacity, financing and market demand were secured.

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Services

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Navigator provided an integrated combination of investment, commercial and financial advisory services, including:

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• Concept Development;

• Proof of Concept / Pre-Feasibility Study;

• Market Analysis;

• Location Assessment;

• Investment Strategy;

• Investment Planning;

• Capital Expenditure Planning;

• Financial Modelling;

• Revenue and Profitability Analysis;

• Energy Infrastructure Assessment;

• Risk Analysis and Risk Mitigation;

• Project Finance Planning;

• Investment Structuring.

 

Outcomes & Results

 

The assignment established an initial investment framework for entering the North American data centre infrastructure market.

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Navigator developed a phased strategy targeting approximately 200 MW of capacity over ten years, representing approximately US$1.36 billion in indicative investment. The model provided investors with a framework for progressively committing capital while linking subsequent development phases to infrastructure availability, financing and market demand.

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The study also established the principal requirements for Phase 1, including land acquisition, grid and interconnection expenditure, expandable substation and power infrastructure, permitting, site preparation and development contingencies.

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The resulting Concept Study provided the investor group with a structured basis for deciding whether to proceed to site identification and acquisition, detailed technical feasibility, utility negotiations, financing and investment structuring, and subsequent project development.

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Areas of Expertise

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Data Centres | Hyperscale Data Centres | AI Infrastructure | Digital Infrastructure | Infrastructure Investment | Investment Strategy | Concept Studies | Proof of Concept | Feasibility Studies | Market Analysis | Location Assessment | Site Selection | Energy Infrastructure | Grid Connectivity | Renewable Energy | Investment Planning | Capital Expenditure | Financial Modelling | Project Finance | Investment Structuring | Risk Analysis

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Confidentiality Notice

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The project reference presented here is a actual example of Navigator Consulting's experience. Stock photography and conceptual images are used for illustrative purposes only and do not depict the actual project, client, owner or location. Certain technical, financial and commercial information has been modified, generalised or omitted in order to preserve client confidentiality and commercially sensitive information.