Politics

Capas, Tarlac to host $2.71-B data center hub

2 Mins read
REUTERS

NARRA Technology Park Development, Inc. said it is investing around $2.71 billion in a 300-megawatt (MW) hyperscale data center hub in Capas, Tarlac.

On Tuesday, Narra signed a lease agreement with Tarlac province for a 47-hectare site, upon which the company plans to build a hyperscale data center to be completed in three phases of 100 MW each.

William M. Johnson, Narra managing director, said that the company is expecting to spend around $890 million for each phase of the data center, while an additional $35 million will be used on road development.

Citing a study by Cushman and Wakefield, Mr. Johnson said that three 100-MW data centers may could potentially cost under $3 billion.

“So it’s a very, very significant investment, install all the racks and the servers, and bring it to full operation,” he added.

He said the $2.71 billion does not include the additional costs involved en route to achieving the target of being 100% powered by renewable energy within the first five years.

Asked why the company chose the Philippines, he said: “The Philippines is an ideal location for the data center industry due to its large industrial land parcels, growing availability of clean renewable energy sources, and supportive digital infrastructure strategy from the Philippine government.”

He added that the Philippines has an estimated operational capacity of only 67 MW for data centers and favorable conditions for data center development, making it attractive for investment.

The data center hub is expected to rise at Clark Science City in Capas, Tarlac.

Mr. Johnson said New Clark City is an ideal location because the availability of land is a challenge in Metro Manila. He added that the New Clark City masterplan accommodates the development of a modern hyperscale data center hub.

“Additionally, New Clark City’s proximity to Metro Manila ensures excellent connectivity to the capital region,” he added.

The project, including the construction phase, is expected to generate over 1,500 direct jobs. Upon completion, the site will host 200 highly skilled workers in information technology operations, maintenance, cybersecurity, and other areas.

The first phase of the project is expected to be fully commercially operational by the fourth quarter of 2026, though the 2026 target could slip depending on demand.

“The subsequent phases in our original business plan (were planned to be) less than a year after each other, but that’s wholly dependent upon demand and uptake,” Mr. Johnson said. 

“But we know that phase one is going to be taken up very quickly and built out. And we also believe that with phase one coming online, we’ll see that this is actually a very viable business model, and we expect the other two phases to go fairly quickly,” he added.

The lease entered into by the Tarlac government and Narra has a 50-year term that can be extended for a total of 25 years, subject to negotiation, Bases Conversion and Development Authority (BCDA) Chairman Delfin N. Lorenzana said.

Under the agreement, the Tarlac government and BCDA will have a 60–40 revenue split, respectively, from the Narra lease.

Asked to elaborate on the lease terms, Mr. Lorenzana said the company will pay the “prevailing price” to operate at the site. — Justine Irish D. Tabile