Fostering data-centre development in an up-and-coming Tier II digital destination

“Analysys Mason provided support to our client that convinced lenders of Lisbon's attractiveness for developing data centres.”

- Daniel Ponte Fernández, Principal, Analysys Mason

The challenge

Lenders needed convincing of the client’s attractive developments in Lisbon 

A leading pan-European edge data-centre provider commissioned Analysys Mason to conduct detailed commercial due diligence of the data-centre market in Lisbon to support its discussions with potential lenders. 

Lisbon is an attractive destination for such deployment, thanks to ample submarine cable connectivity as well as the low price and high availability of renewable energy. Government leaders in Lisbon sought to capitalise on these attributes and expand Lisbon's data-centre capacity in the future. 

Analysys Mason helped show lenders that the longer-term outlook was positive. The client’s plans to build two greenfield data-centre sites provided a differentiated offering to hyperscale, big-tech, global network and large enterprise clients seeking capacity.

Our approach

We assessed the local market and prospects for wider European expansion 

Source: Analysys Mason

Our client sought funding for two data-centre sites in Lisbon, a city that is still an emerging European tech hub in the data-centre market. We reviewed the sites, the current market dynamics, the competition and the company’s business plan.

First, we examined the data-centre landscape in Portugal and provided insights into upcoming tech developments. This included an overview of existing data-centre demand in Europe and its expected growth in the future. Next, we conducted a high-level assessment of the project’s business plan, which analysed key revenue, opex and capex estimations.

Lisbon has a thriving tech scene, and demand is far outstripping supply, meaning it has a growing addressable market. The suburb where the potential building sites were to be located is close to the landing point for multiple submarine cables, and customers could take advantage of this connectivity gateway.

We developed the case for an ‘Iberian hub’, showing how this infrastructure connected Lisbon to larger markets, such as Madrid and Barcelona, and also how the Iberian peninsula could then connect to other markets in continental Europe or even other regions. We gave an overview of Spain's data-centre market, looking at hyperscalers' strategic dynamics in the country, and the specifics of supply and demand. We also analysed how data-centre demand in Spain is expected to affect Portugal's data-centre market.


For reference, we offered a case study of the Marseille data-centre hub, whose evolution could serve as an example for Lisbon. A decade ago, Marseille had strong submarine cable connectivity but no data centres. It has since expanded demand, becoming France’s second-largest market for such infrastructure.

We covered broader topics relevant to the client’s greenfield build in Lisbon. One section detailed the deployment of submarine cables connecting other continents and the high-level implications these would have on the client’s project.

The impact 

The ‘Iberian hub’ proved attractive to investors and financing was approved 

The result was an unqualified success: the lenders agreed to the inaugural large-scale debt financing of more than EUR500 million for our client. This would be a big step for the development of digital infrastructure in Portugal, a small country with large ambitions.  

Construction is already underway on the first site, LIS1 (5.1MW), located in Carnaxide, within the Lisbon Metropolitan Area. 

Sustainability is important to both our client and to local officials, as part of Portugal’s aims to be a global green tech hub. The financing includes a number of sustainability-linked targets focusing on efficiency and renewable energy usage. Both sites will be 100% powered by renewable energy. They will recover and reuse waste heat and the water use will minimise wastage as well.