Techno Electric to invest $1 bn in data centers

CIOReviewIndia | Tuesday, 07 September 2021, 04:06 IST

Techno Electric to invest $1 bn in data centersPower infrastructure major Techno Electric and Engineering Company (TEECL) is planning to invest $1 billion (about Rs 7,310 crore) in setting up data centres across key Indian cities.

The Kolkata-based listed company with more than 400 completed engineering procurement and construction (EPC) projects is looking to develop data centres backed by green energy.

“We will be leveraging our renewable energy assets across the country to ensure these data centre projects are 100% powered by renewable energy and remain carbon-neutral. With this objective, we have finalised a plan to develop 250 MW of data centres across India over the next five years,” Ankit Saraiya, wholetime director, TEECL, told.

The company is targeting Mumbai Metropolitan Region (MMR), Hyderabad, Pune, National Capital Region (NCR), Chennai and Kolkata for setting up data centres.

For its first project, which is coming up in Chennai, the company has acquired a four-acre land parcel from the Tamil Nadu government at SIPCOT IT Park in the city’s southern suburb of Siruseri.

The company is investing about Rs 1,200 crore to develop this data centre with a total load capacity of 45-60 MW, and preliminary site activities for this development have started.

The second project in Kolkata will also be of almost the same size as that of the Chennai data centre and will be developed on nearly five acres with an investment of about Rs 1,200 crore.

“Both Chennai and Kolkata data centre projects will comprise around $340 million and one-third of the total planned $1 billion investment,” said Saraiya. “We are a debt-free company with over Rs 800 crore of cash reserves. We generate around Rs 200-250 crore of revenues through our EPC business year-on-year. We are well-funded internally to build these projects.”

The company may opt for leverage 60-40 with debt-equity composition, and it is also open to divesting equity in these projects.

The Chennai project will be 100 % carbon-neutral as the company has 111 MW of wind energy assets in Tamil Nadu that will be used to fuel the data centre there. The company has also acquired two 10 MW biomass energy plants in Kolkata that will be feeding power to the data centre in the eastern city and this will also be 100% renewable.

TEECL’s third data centre, in Hyderabad, will be developed over a larger parcel of land than in Chennai and Kolkata. It may go up to 50 MW and will be completely powered by the company’s captive solar power infrastructure in Hyderabad. The company’s fourth project would be in either Mumbai, Pune or Noida. It has engaged a consultant to study and survey these markets.

“Apart from renewable energy, we will ensure that a fourth of the land is left for green space, where we would like to plant trees and develop parks to ensure it is further environment friendly. We will try to bring disruptive technologies in the power infrastructure space to ensure power consumption is as efficient as possible,” said Saraiya.

Data centres in India are emerging as the most attractive growth opportunity for global institutional investors and leading developers. Investments are flowing into the data centre markets, with multiple new markets being created simultaneously, along with the rapid development of campus sizes found in the most established global cities.

So far, $13.5 billion investment has been planned and committed for developing data centres in the country and overseas firms’ contribution in this is more than 70%, showed data from Cushman & Wakefield.

Leading global entities, including STTelemedia, ESR, NTT, Colt and Princeton Digital Group, Brookfield Asset Management and Digital Realty, have already started investing in this segment.

In recent years India has undergone significant digital transformation, with active internet users reaching 525 million in 2019, representing an annual growth of over 19%. Low-cost smartphones and cheap data tariffs have accelerated the shift to digital, with data consumption increasing 37 times between 2014 and 2018.

With a population of more than 1.3 billion and data consumption per user forecast to reach 18 GB per user by 2024, India represents a major market opportunity, surpassed only by the US and UK.

Don't Miss ( 1-5 of 25 )