Stay informed with free updates
Simply register at American companies myFT Digest – Delivered straight to your inbox.
A Meta-backed data center campus is seeking $3 billion in construction loans for an off-grid project with novel financing in which lenders finance both the building and energy assets in a single transaction.
The debt package involves a first-of-its-kind deal for a data center that would generate its own power on-site with natural gas supplies, according to people familiar with the matter.
The combination of data center and energy financing simplified the process of obtaining debt but increased the risk of project delays, the people said.
“It’s more complicated,” according to a person familiar with the deal. “As if you were subscribing to two very different types of assets at once.”
The campus, known as “Project Walleye,” is named after the freshwater fish commonly found in Ohio, where the data center is located, people familiar said. Large technology companies often assign code names to projects to ensure confidentiality.
EdgeConneX, a data center operator acquired by private equity firm EQT, will manage the New Albany, Ohio, campus.
Meta and EQT declined to comment. EdgeConneX did not immediately respond to a request for comment.
The loans have been offered to potential investors at 2.5 percentage points above the guaranteed overnight funding rate, slightly higher than other projects backed by big tech companies, due to additional risks.
“[Project Walleye] “You need to pay more to offset the risks of project after project,” said one investor criticized for the debt.
Still, some investors are attracted to the deal because of EdgeConneX’s track record in delivering large-scale projects, as well as strong backing from EQT. Its other clients include Nvidia, Google and Oracle.
“We are comfortable because [EdgeConneX] “He has the experience and the knowledge,” said a second investor.
The debt is currently being syndicated to project finance banks and large institutional investors, and is expected to close in the coming weeks, according to people familiar with the matter.
It was also expected to receive a private investment grade rating thanks to the leasing deal with Meta, which would allow the debt to be sold to a broader group of investors, the people said.
Tech companies building large data centers are increasingly adopting so-called behind-the-meter power to avoid delays in grid connection, which is increasingly difficult to secure due to the increasing growth in AI-driven energy demand.
Google also plans to provide financial support for a multimillion-dollar data center leased to Anthropic in Texas, where the campus will be powered by its own gas turbines, the FT previously reported.
Project Walleye would operate in “island mode,” people familiar added, where the data center will have its own microgrid and operate independently of the main power grid in the first few years. Ultimately, it could seek grid connection when it becomes available, they said.
