Portuguese operator Ar Telecom, which was acquired by Spanish provider Aire Networks last February, is set to erect a 1,400 sqm/15,000 sqft data centre facility in the Grande Lisboa region, joining a growing trend of investments in the country.

The building will accommodate 150 racks at an initial load with capital commitment amounting to €10 million (US$11.35 million).

The cash, privately financed by the business, will be also used to expand Ar Telecom’s fibre optic infrastructure whose deployment is expected to be concluded before the end of 2022.

CEO Tiago Oliveira Santos told local newspaper ECO that the data centre site can be expanded to cover over 4,200sqm/45,200 sqft in gross floor space as demand forces further expansion. The facility is scheduled to come online in 2023.

Ar Telecom, which has until now leased data centre space from local operators in Lisbon, Porto and Viseu including Equinix (NASDAQ: EQIX), said it is currently drafting the business model for the new site’s operations as well as looking at renewable energy options, including solar, to power the centre.

Santos said: “We already have a data centre, but we hope to become much more competitive in that area, through the use of renewable energy and a much more efficient, much more modern design concept than what was done 20 years ago.”

In addition to the data centre and expanded national fibre footprint, Ar Telecom is also upgrading its links into Spain by reinforcing its high-capacity fibre routes into the neighbouring country, further connecting the Iberian nation to Central Europe.

The operator, which was founded in 2000, estimates the projects will add up to 200 direct and indirect jobs to its books, mainly within the Lisbon and Porto regions.

Santos added: “As a country, we have the capacity to turn Portugal into a Silicon Valley, because it is a country where everyone wants to go and live. It is a country where we can not only retain Portuguese talent but also attract international talent to come here.

“As a medium-sized company, we want to make our contribution with these investments we are making and we see some movements in the market with other investments that give us some hope that the country will move in that direction. We think that the country should adopt the Silicon Valley as its medium/long term strategic goal. We are here to give our humble contribution in that direction.”

According to CBRE, the Portuguese data centre market is set to see a surge in investments driven mainly by the adoption of cloud computing, artificial intelligence (AI) and internet-of-things (IoT).

Anthony Labadie, data centre solutions director for CBRE Iberia, said: “The presence of new investors, combined with growing demand, will push service providers to ensure high data centre capacities to meet the needs of their customers, both in the public and private sectors.

“Portugal, and Lisbon in particular, will see a major transformation in the current data centre landscape. Ambitious new projects are expected to come to market in response to the growing interest of international service providers in establishing a presence in the Portuguese market.”

Key recent announcements in the field, include the $4.2 billion start campus’ Sines 4.0 data centre campus to be built in the port town of Sines. The project is backed by Pioneer Point Partners and Davidson Kempner Capital.