Infratil (ASX:IFT) is partnering with two of its portfolio companies — Contact Energy (ASX:CEN) and CDC — to explore the development of a large-scale data centre in the Taranaki region of New Zealand. The proposal reflects a broader global trend where hyperscale data centre operators are targeting regions with abundant renewable energy to meet the accelerating infrastructure demands of cloud computing and artificial intelligence.

Infratil, a New Zealand-based infrastructure investor, holds majority or significant stakes in both CDC—one of Australia's largest data centre providers—and Contact Energy. Infratil chief executive Jason Boyes described the partnership as an attractive infrastructure opportunity for the region.

"We're excited by this opportunity to combine CDC's extensive data centre expertise and sustainability credentials with Contact Energy's existing infrastructure, renewable electricity generation, and substantial pipeline of renewable energy projects," he said. "The ability to use data centre demand to underpin regional investment in more renewable generation and jobs is an idea worth exploring."

Contact and CDC plan to seek resource consent for a 250 MW data centre near the site of Contact's Taranaki Combined Cycle gas power plant (TCC), which was retired earlier this year after reaching end-of-life. The facility would be supported by co-located battery storage development. Repurposing the retired TCC site aligns with Taranaki's ongoing economic transition away from its historical reliance on oil and gas exploration.

Contact CEO Mike Fuge outlined the energy supply strategy for the proposed facility.

"It is our intention that electricity for the proposed facility would be supplied under long-term contract, supported by new generation from Contact's 11 TWh pipeline of geothermal, wind and solar development options," he said.

"Large-scale, long-term, contracted demand underpins investment in new renewable generation and batteries, rather than relying solely on existing supply."

Fuge added that the project aligns with Contact's broader regional development goals.

"Our strategy is to lead New Zealand's renewable energy future. And, as part of that, we are playing our part in the economic regeneration of the regions. We believe Stratford shapes as an ideal location to explore a digital hub powered by renewable energy from where the local Taranaki economy can thrive, and the wider energy system and New Zealand can benefit."

Peak construction employment for the data centre is expected to be comparable to Contact's Tauhara geothermal power station, which provided more than 600 jobs in Taupo at its peak. Once operational, the facility is anticipated to employ roughly four times as many skilled workers as the former TCC.

Prior to market open, IFT was steady at $12.45 with a market capitalisation of $12.52 billion.