According to DCD, European data center operator AtlasEdge has secured €253 million ($294.8 million) in green financing to support the development of its campus in Lisbon, Portugal. The seven-year senior secured Term Bond facility includes €63 million for constructing LIS001 and €190 million for LIS002, with Banco Santander and ING acting as bookrunners where ING served as Sole Sustainability Coordinator. The Lisbon campus in Carnaxide will deliver 30MW across three phases through a €500 million investment, with LIS001 launching this week and scheduled to go live by end of 2025, while LIS002 is in master planning with 2028 ready-for-service date. The company has also acquired a 10,000 square-meter plot for LIS003, with CEO Tesh Durvasula calling the campus “a game-changer for customers operating in the Portuguese market.” This substantial investment marks a significant moment for Southern Europe’s digital infrastructure landscape.
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Portugal’s Emerging Strategic Position
Portugal’s emergence as a data center hub reflects broader geographic diversification trends in digital infrastructure. While Northern European markets like Frankfurt, Amsterdam, and Dublin have historically dominated the continent’s data center landscape, Southern Europe offers compelling advantages including lower energy costs, milder climates reducing cooling requirements, and strategic positioning as a gateway between Europe, Africa, and the Americas. Lisbon specifically benefits from multiple subsea cable landings, including the EllaLink connecting directly to Brazil, making it an ideal location for latency-sensitive applications serving transatlantic markets. The timing coincides with increasing corporate interest in secondary European markets as primary hubs face power constraints and environmental pressures.
The Green Financing Revolution
The structure of this financing arrangement reveals how sustainability has become central to data center economics. Green financing typically carries lower interest rates and attracts institutional investors with ESG mandates, creating a virtuous cycle where environmentally conscious construction improves financial returns. For AtlasEdge, securing ING as Sole Sustainability Coordinator indicates their commitment meets rigorous environmental standards, likely including power usage effectiveness (PUE) targets, renewable energy procurement, and water conservation measures. This €253 million facility follows their previous €725 million credit facility, demonstrating how established operators can leverage their track record to access favorable capital for expansion. The trend toward sustainability-linked financing is reshaping how digital infrastructure projects are funded across Europe.
Southern Europe’s Competitive Reshuffling
AtlasEdge’s expansion reflects strategic positioning against both global hyperscalers and regional competitors. Formed as a joint venture between Liberty Global and DigitalBridge, the company benefits from anchor tenants including Virgin Media and Sunrise-UPC, providing stable revenue while they pursue wholesale and hyperscale customers. Their acquisition strategy—buying twelve data centers from Colt DCS in 2021, Germany’s DC1 in 2022, and facilities in Austria—shows a deliberate pan-European approach rather than concentration in single markets. The Lisbon investment positions them against Equinix and Digital Realty in a market with growing demand from cloud providers, financial services, and content delivery networks. Southern Europe represents one of the last under-penetrated regions for quality data center supply, creating first-mover advantages for operators establishing presence.
Execution Challenges and Market Risks
Despite the promising outlook, significant execution challenges remain. Portugal’s power infrastructure must support rapid data center growth without straining the national grid, particularly as the country aims for carbon neutrality. The phased development schedule—with LIS002 not operational until 2028—creates revenue timing mismatches that the euro-denominated financing must bridge. Supply chain constraints affecting critical components like generators, UPS systems, and transformers could delay construction timelines, while skilled labor shortages in Portugal’s technology sector may impact operational readiness. Additionally, as more operators recognize Portugal’s potential, competition could intensify faster than demand grows, potentially affecting long-term pricing power and occupancy rates.
Regional Implications and Future Outlook
The success of AtlasEdge’s Lisbon campus could catalyze further investment across Southern Europe, particularly in Spain and Italy where similar geographic and economic conditions exist. ING‘s strong appetite for data center financing signals institutional confidence in the sector’s growth trajectory despite economic headwinds. For Portugal specifically, becoming a digital infrastructure hub could attract technology companies, research institutions, and startups seeking reliable connectivity and cloud access. The next 12-18 months will be critical as LIS001 moves toward operational status and pre-leasing for LIS002 accelerates. If AtlasEdge successfully demonstrates Portugal’s viability as a primary data center location, we can expect accelerated investment across the Iberian Peninsula, potentially making Southern Europe the next battleground for digital infrastructure dominance.
