Eni, Dubai-based Khazna team up to build data center campus in Italy

Italian energy group Eni and Dubai-based Khazna have signed a preliminary agreement to jointly develop a 500-megawatt data center campus near Milan, Italy, as part of a broader Italy-UAE digital infrastructure initiative targeting 1 gigawatt of IT capacity. The facility will be powered by Eni's 'blue power' from a gas plant equipped with carbon capture technology, highlighting an ESG-aligned approach. This significant investment aligns with projections for Italian data center spending to double to 10 billion euros ($11.7 billion) by 2026, signaling robust growth in the region's digital infrastructure sector.

Analysis

Italian energy group Eni is making a significant strategic move into the digital infrastructure sector through a preliminary joint venture with Dubai-based Khazna to develop a 500-megawatt data center campus near Milan. This project is a key component of a broader Italy-UAE partnership targeting up to 1 gigawatt of IT capacity, underscoring the scale of the ambition. A critical feature of this venture is its reliance on 'blue power'—electricity sourced from an Eni gas plant equipped with carbon capture technology—which cleverly links Eni's legacy energy operations with a high-growth, ESG-aligned business. This initiative positions Eni to capitalize on a burgeoning market, as data center investments in Italy are forecast to double to 10 billion euros by 2025-2026, tapping into strong secular growth trends.

Key Decisions for Investors

• Investors should view this joint venture as a positive catalyst for Eni, as it represents a strategic diversification into the high-growth digital infrastructure market with a compelling ESG component.
• It is prudent to monitor the progress of this preliminary agreement towards a definitive deal, as execution on the 500 MW project and the efficacy of the associated carbon capture technology will be key to realizing its value.
• The deal reinforces the bullish outlook for the Italian digital infrastructure sector, suggesting potential opportunities in other public or private companies poised to benefit from the projected doubling of data center investment in the region.