Portugal is rapidly consolidating its position as one of Europe’s most promising emerging data center markets, underpinned by strong international connectivity, growing institutional support, and large-scale investment commitments.

According to the latest Data Centers report, “Iberian Region Snapshot – October 2025 to March 2026”, by Colliers, a global and diversified professional services and investment management firm, the country now has over 2.6 GW of planned IT capacity, with Lisbon alone accounting for 1,389 MW of IT, a significant increase compared to the 373 MW of IT recorded just a year earlier.

Lisbon: from emerging market to European competitor

Over the past six months, Lisbon’s operational IT capacity has increased from 20 MW to 25 MW, following the commissioning of LIS001, AtlasEdge’s first data center in the city. However, the most significant change occurred in the development pipeline, where investor interest accelerated at an unprecedented pace.

This expansion is driven primarily by Merlin Edged, which announced up to 1,300 MW of planned total IT capacity in the Lisbon region, positioning its platform as a candidate to host one of the European Union’s future AI gigafactories, in partnership with the Portuguese government. The company currently has 80 MW of IT under construction, with commissioning expected by the fourth quarter of 2027, and a further 100 MW of IT already secured.

Other international operators have also strengthened Lisbon’s profile. AtlasEdge secured €253 million in green funding to expand its Lisbon campus to 30 MW of IT capacity, while Digital Realty entered the Portuguese market through the acquisition of a 2.4 MW IT facility located next to the submarine cable landing stations in Carcavelos, with operation scheduled for 2027.

“Lisbon has gone from being perceived as an emerging market to becoming a credible alternative for large-scale digital infrastructure in Europe,” says Gonzalo Martín, Managing Director and Head of Data Centres Capital Markets, EMEA at Colliers. “Its international connectivity, combined with political support and the scale of the announced projects, firmly places the city on the radar of hyperscalers and intelligence-driven platforms.”

Portugal: Scale, Connectivity, and Execution Capacity

Beyond Lisbon, Portugal’s data center ecosystem is further strengthened by flagship developments such as the Start Campus in Sines, with a planned capacity of 1,169 MW of IT, and the Asterion Industrial Partners campus in Covilhã, with the potential to expand to 75 MW of IT. In total, Portugal’s pipeline outside Lisbon reaches 1,237 MW of IT, highlighting the country’s capacity to host both hyperscale and AI-focused workloads.

Portugal’s attractiveness is underpinned by its strategic geographic location and one of Europe’s most robust submarine cable ecosystems, connecting the Iberian Peninsula to North America, Africa, and Asia. This connectivity advantage, coupled with increasing demand for AI-ready infrastructure, is accelerating Portugal’s integration into global digital networks.

However, the report also emphasises that execution capacity and access to energy are becoming key factors for success.

In early 2026, Portugal introduced a new regulatory framework for network access in high-demand areas, abandoning the “first come, first served” model in favor of a more structured and competitive process. While this increases barriers to entry, it is expected to benefit well-prepared and feasible projects, reducing speculative developments.

“The data center market is no longer defined solely by demand, but by execution capacity,” explains José María Guilleuma, Managing Director of Data Centers at Colliers Iberia.

“Portugal has many of the structural characteristics that investors are currently looking for, but the next phase of growth will depend on how efficiently projects are implemented within the new regulatory and energy frameworks.”

Start Campus -Portugal’s largest data centre

At a conference (See link for more details) on Data Centres organised by the American Chamber Of Commerce in Portugal (AmCham Portugal) held last month, Robert Dunn, CEO of Start Campus, the largest data centre project currently underway in Portugal and one of the largest in Europe, explained why the developer chose Portugal.

“Our journey started back in 2020. We had the vision of building Europe’s largest and most sustainable data centre at the time and even before AI.

We knew the hyperscalers were building bigger and bigger data centers within locations of patrons, but the market wasn’t really thinking ahead. So our move was to go and find a site that had it all, so we could think ahead and be ready for when those customers would come to us, because that takes years of planning”, recalled the CEO of the development of the 1.2 GW SINES DC project in Portugal which is primarily backed by U.S. investment firm Davidson Kempner Capital Management and British firm Pioneer Point Partners.

Dunn said they had looked everywhere in Europe. “We wanted to bring this large data centre to where the power was, not just any old power, but renewable, low-cost power.  We wanted to choose a location that had good connectivity links, and it needed to be a sustainable data center. And by that, I mean we needed to have local resources that we could work with, and we need to have a unique and hopefully very efficient cooling solution”, he added.

Robert Dunn, CEO of Start Campus (Right) tête-à-tête with EDP and EDPR CEO Miguel Stilwell d’Andrade a the American Chamber of Commerce event on Data Centres held in Lisbon in April.

Sines, 70km south-west from Lisbon fitted the bill despite the fact that it had a bundle of 100 different sites that they examined.

“It took over a year to finally select Sines. But the first hurdle was making sure we had power. So at that time Sines had a very well-connected transmission grid. There’s the basic infrastructure there. We were able to secure almost 500 megawatts of power day one through the grid. The connection through the grid just gets you started”, recalled Dunn.

There was obviously a big ambition. “We still hold that ambition to make sure that the grid had additional projects that connect into it that we are responsible for implementing, and working with partners like Portugal’s electricity company EDP to make sure that happens.

But our customers demand speed and accuracy. We’ve got to have a grid connection from day one, and that grid availability has to be there. And then there is an amount of time until you can get this complex sold and then behind other projects to support that, so that you’re not just taking from the grid, you’re actually adding to it”, he said, explaining the genesis of the project in Portugal.

The site has a subsea cable that goes directly to almost all of the contents in the world and customers see that as a plus because otherwise it would cost customers hundreds of million of dollars to make a connection to the next largest location.

“The most important sustainable aspect for us was making sure that we were building in a location like Portugal, which is a little warmer than the Nordics. We wanted to make sure we had a cooling solution that would both give us power efficiency and we were able to reuse EDP’s decommissioned coal-fired power plant facilities that have almost three gigawatts of heat rejection through a seawater intake facility.

Plus, the use of seawater meant that the project was not not using excess power that it didn’t need, and would not use any industrial water, which most data centers do.

Dunn said that the advantages of moving quickly and getting the 500MW project announced and underway was that when AI started to gain traction in 2022 and 2023, Start Campus was already a solution that worked, was ready to build and could scale up quickly.

“We announced that we would be a 1.2GW project which blew away the market because that didn’t exist in Europe at the time”, he recalled.

Start Campus spent the first two years building the first building and had its permits approved in 2022 and then from 2022 to 2024 it has been building the first infrastructure, proving to its customers that they could do it.

It then developed the ecosystem around it so that it could then have speed to build out the rest of the campus.

“We’re now there in terms of the ecosystem. That building is operational, has been for some time, and as of two months ago, it’s now fully operating, fully filled up with customers, and operating some of the latest AI chips in the market today”, said the Start Campus CEO.

As of May 2026, Start Campus is rapidly advancing its 1.2GW Sines Data Campus. The first facility, SIN01 (31 MW), is operational and fully leased, while Nscale announced the installation of over 66,000 Nvidia Rubin GPUs by 2027 for Microsoft. The project is shifting toward its next phase (SIN02) powered by renewable energy and seawater cooling.

Photo: Robert Dunn, CEO of Start Campus, one of Europe’s largest data centre parks in Europe.

Sources: Colliers/Essential Business/AmCham Portugal