MAKAREWA — Singapore-based Datagrid has received approval to construct an AI datacentre on a 49-hectare site in Makarewa, New Zealand. The project carries an estimated cost of NZ$3.5bn (US$2bn) with construction planned to start in the current year, and operations anticipated to begin by 2028.

The facility is designed for AI training, processing, and data storage for global AI and cloud providers. It is projected to consume 280MW of electricity, which would make it New Zealand's second-largest electricity user after the Tiwai Point aluminium smelter. Environment Southland regional council reports indicate that Datagrid has received approval to discharge air contaminants from up to 84 diesel back-up generators, draw up to 604,800 litres of groundwater daily, discharge up to 5,000 litres of treated wastewater per day, and remove a nearby wetland.

Datagrid states that the construction phase will create approximately 1,200 jobs, with about 50 permanent positions expected upon completion. Economic geographer Angus Dowell said, "[The centres] provide short term economic benefits in the form of construction, but they're very, very low employers long term, and so the long term benefits to local economic development are just not there, they don't stack up."

Rémi Galasso, chief executive of Datagrid, stated that Southland's cool climate minimizes the need for water, and the company plans to operate under long-term renewable energy arrangements, avoiding competition for household electricity. Kelly Blomfield, chair of the Southland Sustainable Resource coalition, said, "Locals down here kind of feel like we've had our region sold out from underneath us." Blomfield added, "I think that most people's actual concern is that we don't find out anything until its done." Dowell also said, "It's fair for us to look at other places in the world and see the environmental impacts of datacentres, the highly asymmetrical distribution of value as part of the big tech AI economy, and say: we need to know more."

Invest New Zealand aims to attract NZ$25-30bn in foreign investment for datacentres and AI infrastructure. A report from Boston Consulting Group suggests this industry could generate up to $70bn in economic activity over the next decade.

Why It Matters

The Datagrid AI datacentre represents an infrastructure investment in New Zealand, valued at NZ$3.5bn, and is part of a larger national effort to attract foreign investment in AI and datacentre technology. Its projected electricity consumption of 280MW makes it a substantial energy user, and its operational approvals include provisions for air and water discharge, as well as wetland removal. The project has generated discussions regarding its long-term economic benefits and environmental impact, with some locals expressing concerns about transparency and the distribution of value from such large-scale developments.